It may be difficult to distinguish between repairs and improvements you make to your company's assets, but the difference from a tax point-of-view is vast.
The cost of a repair may be claimed as a tax deduction under income tax legislation and the cost of an improvement may not.
A repair is the replacement of a part of an asset in order to restore the entire asset to its original state and condition. Generally, the replacement would have become necessary because the original asset has become worn out or broken.
An improvement, on the other hand, may involve significantly adding to the asset, or reconstructing it, and may consequently increase its ability to earn income.
For example, if you build a new office next to your existing premises, you have clearly improved the premises as a whole, whereas if you replace the roof of the existing office because it was leaking, that would be a repair.
If, however, you replace a corrugated roof on a property, which is serving its purpose perfectly well, with a slate roof because it will improve the aesthetic appearance of the building and enable you to rent it out more easily, then that would be an improvement.
You are not restricted to repairing something that is broken with the same material in order for it to be regarded as a repair. If you have wooden window frames that have rotted from the damp and consequently leak, you can replace them with aluminium frames, and the expense would still be regarded as a repair for tax purposes. The frames constitute a part of the building which, through the replacement of the frames, has been restored it to its original state and condition.
It's not an easy distinction, but being aware of the difference between what is a repair, rather than an improvement, may assist you to secure the best tax deduction next time you have work done on a business asset.
If you decide to give the property from which you conduct your business a facelift, you can do one of two things. You can give it a fresh coat of paint, replace all the rusty doorknobs and the broken skirting, and so on. Or you can start knocking holes through walls and building additions. In the former case you would be repairing your building, and would be able to claim your expenses as a tax deduction. In the latter, you would be improving the building and you would not be able to deduct the costs.
Often, the work involves a bit of both repair and improvement.
If all the work is reflected on the same invoice it may be difficult to justify what constituted repairs to existing parts of the property versus what constituted improvements.
Ideally you get separate invoices detailing the different types of work performed, and the costs, so that you can deduct an accurate amount representing repairs only.
However, if the work involved gutting the building and virtually reconstructing it, this would probably be viewed entirely as an improvement and not as a repair, notwithstanding the fact that, for example, some of the walls may have been in a poor state and in need of repairing.
The courts have said that each situation must be evaluated on its merits. There is no hard and fast rule when the answer to the question is grey.
The best advice I can give is be aware of the difference, and if you have repairs done and want to ensure that the cost of the work can be deducted for tax purposes, be sure that you can substantiate what work has been performed.