Capitalised Expenses VS Revenue Expenditure

Capitalised Expenses 

• These expenses are then depreciated over the useful life of the asset 
• These expenses are added to the balance sheet, rather than the profit and loss. 

• They are usually for plant and machinery such as computers, phones, office equipment. A good rule of thumb is to consider capitalising the expense only if it is over £100 
• Capital allowances can be claimed on many capitalised transactions. 

Revenue Expenditure 

• These are short term expenses that are typically to be used or the benefits received within 1 year of purchase. 
• They are the running costs of the business and therefore the vast majority of expenses for most businesses will be revenue expenditure.