The changes ensure that tax relief for expenditure incurred on replacement of tools will be obtained under the same rules as those which apply to other capital equipment.

Businesses can claim tax relief under the normal capital allowance regime or, in the case of residential landlords, for the cost of replacing domestic items such as furnishings and appliances.

The measure will be legislated for in Finance Bill 2016.

This builds on the earlier announcement in Summer Budget 2015 that from April 2016 the wear and tear allowance will be replaced with a new relief that allows residential landlords to deduct the actual costs of replacing furnishings.