HMRC has 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. What’s involved?

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

How much tax relief? One thing that hasn’t changed from the original proposal is the amount of deduction your business can claim, which is 2% per year of the costs you incur. In its latest guidance HMRC has set out the requirements for claiming it.

Making a claim. Like other types of capital expenditure, e.g. the cost of machinery, 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. Tip. 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 (see The next step ).

Record keeping requirement. As part of the SBA claim process you create an allowance statement (see The next step ). Although it doesn’t need to be provided to HMRC unless requested, it must include: (1)  details that identify the structure, e.g. address and description; (2)  the date of the written contract for construction; (3) the expenditure qualifying for the SBA; and (4) 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.

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