Are Office Refurbishments Tax Deductible? (2026 Guide)
- 4 days ago
- 4 min read
Short answer: largely, yes. Most UK office refurbishments qualify for significant tax relief — but it depends on the nature of each cost. Repairs are fully deductible as revenue expenses; capital improvements qualify for capital allowances such as the Annual Investment Allowance and full expensing; and structural work may attract the Structures & Buildings Allowance. The key is a detailed cost breakdown so every qualifying element is claimed.
Handled well, tax relief can cut the effective cost of a refurbishment by up to 25% (the main corporation tax rate). Here's how it works in 2026.
This is general information, not tax advice. Tax treatment depends on your circumstances and on legislation that changes — always confirm with a qualified accountant or tax adviser, and check GOV.UK.
Repairs vs capital: the distinction that decides everything
Every cost in a refurbishment falls into one of two buckets, and the bucket decides the relief:
Repairs (revenue expenditure) — restoring something to its previous condition. Fully deductible against profits in the year you spend, with no cap. Redecoration, like-for-like replacement, and HVAC maintenance are typical examples.
Improvements (capital expenditure) — new features or upgrades. Recorded as a fixed asset; relieved through capital allowances rather than deducted in one go.
A repair doesn't have to be exactly like-for-like — a "modern equivalent" still counts (replacing single glazing with double glazing, for example). As a rule of thumb, classify everything you legitimately can as a repair, because that relief is immediate and uncapped.
How different refurbishment costs are treated
Type of work | Tax treatment | Relief |
Repairs & redecoration | Revenue expense | 100% deductible in the year |
Movable items (furniture, IT, movable partitions) | Main-pool plant & machinery | AIA / full expensing 100%, else 18% WDA |
Integral features (electrics, lighting, heating, air-con, lifts) | Special-rate pool | AIA 100% (or 50% FYA), else 6% WDA |
Structural works | Structures & Buildings Allowance | 3% per year |
Land & planning permission | Not qualifying | No relief |
This is why a detailed, itemised cost breakdown from your fit-out contractor matters so much — qualifying items are often buried inside lump-sum construction costs and missed entirely.
The main capital allowances in 2026
Annual Investment Allowance (AIA) — 100% relief on up to £1 million of qualifying plant and machinery each year, for all businesses. The workhorse of most fit-out claims.
Full expensing — 100% first-year relief on qualifying new main-rate plant and machinery, with no cap. It's permanent, but available to companies paying corporation tax (with a 50% first-year allowance for special-rate integral features).
Writing Down Allowances (WDA) — where costs exceed the AIA, relief spreads over time: 18% a year for main-pool items, 6% for special-rate integral features, on a reducing-balance basis.
Structures & Buildings Allowance (SBA) — 3% a year on qualifying structural and building works.
Note: the super-deduction ended on 31 March 2023 and is no longer available — full expensing is its replacement. Any guide still quoting 130% super-deduction is out of date.
Commonly missed reliefs
Even careful businesses leave money on the table. Items frequently overlooked include strip-out costs, professional and design fees, data cabling, security systems and specialist installations. Retrospective reviews of completed projects can still recover missed claims — so it's rarely too late to check.
Budgeting a refurbishment? Model the full cost first with the Zentura Office Budget Calculator, then see what a refurbishment costs and how to maximise your capital allowances.
How Zentura helps
We're a design and build partner, not tax advisers — but we make claiming easier by providing a detailed, itemised cost breakdown your accountant can use to identify every qualifying element. Good communication between you, your fit-out company and your finance team is often the difference between a full claim and a partial one. See our office fit out service.
Frequently asked questions
Are office refurbishments tax deductible in the UK?
Largely yes. Repairs are fully deductible as revenue expenses in the year incurred, while capital improvements qualify for capital allowances such as the Annual Investment Allowance, full expensing or writing down allowances. Most refurbishments attract meaningful relief.
What's the difference between a repair and a capital improvement?
A repair restores something to its previous condition and is deducted immediately as a revenue expense. An improvement adds or upgrades something and is treated as capital, relieved through capital allowances over time or via the AIA and full expensing.
How much tax can I save on an office refurbishment?
Handled well, tax relief can reduce the effective cost by up to around 25% — the main corporation tax rate — though the exact figure depends on your profits, spend and how costs are classified.
Is the super-deduction still available?
No. The 130% super-deduction ended on 31 March 2023. Full expensing, offering 100% first-year relief on qualifying new plant and machinery for companies, is its permanent replacement.
Do I need a specialist to claim capital allowances?
Not always, but a detailed cost breakdown and, for larger projects, a capital allowances review help ensure nothing qualifying is missed. Always work with a qualified accountant or tax adviser.
Tax rules change and every situation is different. This article is general guidance only and not a substitute for professional advice — please consult a qualified accountant or tax adviser and refer to GOV.UK before making decisions.
Planning a refurbishment? Talk to Zentura about a fixed-price project delivered with the cost transparency your finance team needs — get in touch.
