The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
What is structures and buildings allowance (SBA)?
From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA. The following note has been updated for the changes announced in the Spring Budget 2020 but is subject to confirmation in the final legislation.
SBA is given at an annual rate of 3% (from 1 April 2020 for corporation tax and 6 April 2020 for income tax, prior to April 2020 the rate was 2%), of the qualifying expenditure on a straight-line basis over 33 and one-third years, as a deduction in calculating the taxable profits of a trade or other qualifying activity.
The new 3% rate can be claimed on all expenditure, even where the building or structure was bought into use before April 2020. Where a chargeable period spans 1 April 2020 (corporation tax) or 6 April 2020 (income tax) the rate of 2% will apply for days before the relevant date and 3% for the days after that date.
Spring Budget 2020 Overview of Tax Legislation and Rates , para 1.11
CAA 2001, s 270AA(5)
CAA 2001, s 3(2ZA)
The remainder of the guidance note refers only to buildings but applies also to structures.
HMRC has published a guidance note on the SBA and more detailed guidance at CA90000 onwards.
A checklist which can be used by when reviewing whether expenditure on a building or structure qualifies for the SBA can be found in Checklist ― structures and
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
To view our latest tax guidance content, sign in to Tolley® Guidance or register for a free trial.