111. Anti-avoidance of additional VAT liability.

If one person ('B') enters into a transaction with another person ('S') which is a relevant transaction¹, and an annual investment allowance or a first-year allowance² in respect of B's expenditure under the relevant transaction is prohibited³, neither an annual investment allowance nor a first-year allowance may be made in respect of any additional VAT liability⁴ incurred by B in respect of that expenditure, and any such allowance already given must be withdrawn⁵.

If the statutory provisions restricting B's qualifying expenditure in the case of a sale and leaseback⁶ would otherwise apply, and an additional VAT liability has been incurred