Commentary

B3.274 Amount and method of making the structures and buildings allowance

Business tax
Business tax | Commentary

B3.274 Amount and method of making the structures and buildings allowance

Business tax | Commentary

B3.274 Amount and method of making the structures and buildings allowance

The basic rule is that the structures and buildings allowance (SBA) for a chargeable period of one year is 3% (2% before 1 April 2020 for corporation tax and before 6 April 2020 for income tax) of the qualifying expenditure1. The allowance is given on a straight-line basis so that the qualifying expenditure is relieved in full over a 33 and 1/3 year period (50-year period before 1 April 2020 for corporation tax and before 6 April 2020 for income tax). The amount of the allowance is proportionately increased or reduced for chargeable periods of more than or less than one yea2r. If the entitlement conditions for SBA (see B3.271) are met only for a part of a chargeable period, an allowance period ends part way through a chargeable period or if entitlement to allowances ceases during a chargeable period because the building or structure is demolished, the allowance is proportionately reduced3.

Where an accounting period straddles the increase in the rate of SBA in April 2020 the accounting period is to be treated as separate chargeable periods with 2% being claimed for any days before 1 or 6 April 2020 and 3% for any days on or after these dates4.

Any shortfall in allowances due to a business claiming 2% prior to April 2020 can be claimed in the last chargeable period in which an allowance is available, ie when the period of 33 and 1/3 years ends, but only

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