Commentary

B3.421 Balancing allowances and charges

Business tax
Business tax | Commentary

B3.421 Balancing allowances and charges

Business tax | Commentary

B3.421 Balancing allowances and charges

A balancing charge is made whenever the total of any disposal receipts (TDR, see B3.420) exceeds the unrelieved qualifying expenditure (UQE, see B3.420)1.

The amount of the balancing charge to which a person is liable for a chargeable period in respect of qualifying expenditure is the amount of the excess, or, if less, the allowances for earlier periods in respect of the expenditure less the total of any balancing charges for those periods in respect of the expenditure. Where a person is liable to a balancing charge in respect of first year qualifying expenditure (see B3.406A) for the chargeable period in which that expenditure was incurred, any first year allowance made in respect of the expenditure is treated as if it were an allowance for an earlier period2. Accordingly, when there is a disposal event in the year in which the expenditure is incurred, the first year allowance is taken into account in calculating the balancing charge.

Balancing allowances are made when UQE exceeds

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial