Capital allowances: amendment to allowance statement for structures and buildings allowance
Updated 27 October 2021
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This publication is available at https://www.gov.uk/government/publications/capital-allowances-amendment-to-allowance-statement-for-structures-and-buildings-allowance/capital-allowances-amendment-to-allowance-statement-for-structures-and-buildings-allowance
Who is likely to be affected
Businesses claiming Structures and Buildings Allowance (SBA) and preparing an allowance statement on or after Royal Assent to the next Finance Bill 2021-22.
General description of the measure
This measure will add an additional requirement to the existing allowance statement requirement for SBA.
Policy objective
This measure aims to clarify the information to be included within an allowance statement for subsequent owners of structures and buildings on which SBA is claimed. It will allow businesses to more easily and accurately assess their entitlement to SBA, ensuring subsequent owners do not stop claiming SBA earlier than they are entitled.
Background to the measure
SBA was introduced with effect from 29 October 2018 aiming to relieve costs for new structures and buildings used for qualifying purposes. A business must hold an allowance statement containing certain information to be eligible to claim SBA. This measure will amend those allowance statement requirements. There has not been a consultation on this amendment as it is a minor change which will only apply in certain cases. The amendment is to ensure that none of the benefit of the relief is overlooked.
Detailed proposal
Operative date
The measure will have effect on and after the date of Royal Assent to the next Finance Bill 2021-22.
Current law
Current law for SBA is included in Part 2A Capital Allowances Act 2001 (CAA01), inserted by Statutory Instrument 2019 No 1087. The allowance statement requirement is contained within Section 270IA CAA01.
Proposed revisions
A business must hold an allowance statement to claim SBA, which includes certain details such as the date the asset is first brought into non-residential use, which is normally the date the SBA allowance period of 33 and one-third years commences. However, where qualifying expenditure is incurred after the asset is brought into qualifying use or treated as incurred under the simplification rules, the allowance period starts at a later date. This measure requires the allowance statement to include the date qualifying expenditure is incurred in situations where the allowance period commences from this later date.]
Summary of impacts
Exchequer impact (£million)
| 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 |
|---|---|---|---|---|---|
| nil | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
The terms used in this section are defined in line with the Office for Budget Responsibility’s indirect effects process. This will apply where, for example, a measure affects inflation or growth. You can request further details regarding this measure at the email address listed below.
Impact on individuals, households and families
There is no impact on individuals as this measure only affects businesses. This measure is not expected to have an impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be impacts for those in groups sharing protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on a small number of businesses and civil society organisations by adding an additional requirement to the existing allowance statement requirement for SBA. This measure will help to make sure that the allowance statement contains all of the relevant information required for businesses to more easily make accurate claims to SBA.
One-off costs will include familiarisation with the change.
Continuing costs could include having to capture a small amount of additional information when preparing the allowance statement.
Where civil society organisations invest in non-residential structures and buildings they may choose to comply with evidence requirements so that, when they dispose of the asset, any subsequent owner may claim if entitled to do so. If a civil society organisation chooses to comply, they will be subject to the same impacts as businesses.
Customer experience should improve as a result of this change as subsequent owners of structures and buildings on which SBA has been claimed will be able to more easily assess their entitlement to SBA. The measure is entirely beneficial for businesses as it will ensure that subsequent owners do not stop claiming SBA earlier than they are entitled to.
Operational impact (£million) (HMRC or other)
This measure is expected to have minimal operational impact with amendments to guidance required only.
Other impacts
Other impacts have been considered and none has been identified.
Monitoring and evaluation
The measure will be monitored through information collected from tax returns.
Further advice
If you have any questions about this change, contact Joe Layzell on Telephone: 03000 589 347 or email: joseph.layzell@hmrc.gov.uk.