In 2023, HMRC issued a letter asserting that boiler upgrades were not considered repairs. However, HMRC is now reaching out to affected taxpayers, acknowledging the error in this guidance.

HMRC is preparing to dispatch a correction letter to affluent taxpayers and their representatives who had received correspondence from HMRC regarding property income and repairs in 2023. The initial communication urged taxpayers to review the property sections of their self-assessment returns for the tax year ending 5 April 2022.

In the original letter, HMRC informed recipients that expenses related to “upgrading a central heating boiler from an older, less efficient model” were ineligible for tax relief when calculating profits or losses in property business.

Nevertheless, HMRC now acknowledges its mistake. In the correction letter, HMRC concedes that such an upgrade qualifies as an allowable expense if it represents a technological advancement and the new unit performs a similar function to the previous one.

Taxpayers who revised their self-assessment tax returns based on HMRC’s initial letter, and who now seek to claim tax relief for boiler expenses, are advised to contact HMRC via the email address provided in the correction letter.

For additional information, see guidance on property tax and contact us directly.