I'm currently a sole trader operating as a nail technician in a shop that I lease. I would like to diversify and offer hairdressing services too. Firstly, could I put through my business the cost of retraining to be a hairdresser? Secondly, could I also put through the accounts the costs for the shop to be redesigned with extra plumbing, washbasins, etc? I've checked with my landlord, and he's okay with this, provided I return the shop to how it was when I first took out the lease. 

Arthur replies: 

HMRC explains in its Business Income Manual at BIM35660 that if a proprietor incurs expense ‘on training that is unrelated to the business owner’s existing business area (for example, expenditure that allows them to start a new business or expand into a new, unrelated area of business) is unlikely to be an allowable deduction.’ However, in Examples 5 and 6, the individual branched out into an area that is very close to their existing business, and HMRC states that the expense is an allowable expense. So maybe your scenario would be considered similar. Regardingexpenditure on extra plumbing, washbasins, etc., this is likely to come under the category of 'fixtures' for which you can claim 'plant and machinery' capital allowances: see HMRC’s Capital Allowances Manual at CA26025 (but read it carefully).