A brief guide to claiming structures and buildings allowance

HMRC recently published new guidance on the structures and buildings allowance (SBA) following changes to the rules. This includes important information about how to claim it. Nicola Roby, Director at CHW explains what’s involved.

To recap, the 2018 Budget announced that businesses would be entitled to a new tax relief – SBA, where they spent money on or after 29 October 2018 on buying or improving their business premises. There was uncertainty over certain aspects though, including how to claim it. The good news is that the wrinkles have been ironed out and HMRC has published new guidance.

How much tax relief is available?

This hasn’t changed from the original proposal. The amount of deduction your business can claim is 2% per annum for expenditure on the construction of commercial property that does not qualify for capital allowances as either plant, machinery or integral features where all contracts for construction work on a project were entered into on or after 29 October 2018

How to make a claim?

Like other types of capital expenditure, the SBA must be claimed in the capital allowances section of your tax return or, if you run your business though a company, its return. If you have already submitted a tax return for the period in which you incurred costs which qualify for the SBA, you can make an amendment within the time allowed which is usually 12 months from the date of submission of the return.

What records to keep?

HMRC’s guidance indicates that to claim the SBA, you must maintain a “written allowance statement”. There is no statutory form for the statement which means you can keep it in manuscript or digitally (or both). Whilst it doesn’t need to be provided to HMRC unless requested, HMRC says the allowance statement must include:

  • details that identify the structure, e.g. address and description;
  • the date of the written contract for construction;
  • the expenditure qualifying for the SBA; and
  • the date that you started using the structure for your business.

The statement is important because the claim period is up to 50 years and if ownership changes the buyer can only claim the SBA if they have a copy of the statement.

So, if you buy a used structure, you can only claim the allowance if you get a copy of the allowance statement from the previous owner.

For any extensions or renovations that were completed after you started using the structure, you can record separate construction costs on the allowance statement or create a new allowance statement.

For more advice contact us.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

DID YOU FIND THIS USEFUL?

Share it with your network:  

Want more great content?
Sign up to our newsletter

    Follow us

    Tweets by @CHW-accounting

    CHW-Accounting
    @chw-accounting


    Twitter: chw_accounting

    Read enough?

    Want to find out how we can help you and your business? Get in touch today and let's have a chat.

    WHAT'S THE NEWS?

    Grab a biscuit and a brew and read our latest news.

    19 February 2024

    Tax changes – What’s new in 2024?

    by

    We are now well and truly into 2024 and before you know it the end of the 2023/24 tax year on 5 April will be upon…


    Read more >

    12 February 2024

    National minimum wage – a quick guide to the...

    by

    The government sets a national minimum wage and a national living wage to guarantee that workers get a minimum standard of pay. It is a legal…


    Read more >

    7 February 2024

    HMRC to target undeclared dividend payments

    by

    HMRC have advised the Chartered Institute of Taxation (CIOT) that they have commenced a ‘One to Many’ letter campaign directed at taxpayers who HMRC suspect may…


    Read more >

    7 February 2024

    One week on from Self-Assessment deadline

    by

    We are now a week on from the self-assessment filing deadline of 31 January and figures show that more than double the number of taxpayers failed…


    Read more >

    5 January 2024

    Cut to National Insurance from 6th January 2024

    by

    From Saturday 6 January, the average earner will be almost £450 a year better off according to the government.  However, the reality is that due to…


    Read more >

    YOUR CHALLENGES

    No matter what your challenge is, we’ve probably dealt with it before.



    Need an Accountant?

    Get in touch >


    Need an Accountant?

    Get in touch >


    Tax issues?

    Find out more >


    Tax issues?

    Find out more >


    Trying to grow your business?

    We can help >


    Trying to grow your business?

    We can help >


    Managing cashflow?

    We can help >


    Managing cashflow?

    We can help >


    Starting a business?

    We can help >


    Starting a business?

    We can help >


    Looking for funding?

    Need help with funding? >


    Looking for funding?

    Need help with funding? >


    Buying or selling a business?

    We can help >


    Buying or selling a business?

    We can help >


    Adopt the cloud?

    We can help >


    Adopt the cloud?

    We can help >


    What else can we do for you?

    We can help >


    What else can we do for you?

    We can help >
    CONTACT US

    Get in touch, no hard sell, just a brew, a biscuit and a chat.