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HMRC internal manual

Business Income Manual

Specific deductions: Flood and erosion projects: Interaction with Capital Allowances

S86A (2) Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005)

S86A (2) Corporation Tax Act 2009 (CTA 2009)


As outlined at BIM45100, it is possible for a deduction to be allowed under this section where one would not normally be due, for example if the expenditure is capital in nature or not incurred wholly and exclusively for trade purposes. An example of this can be found at BIM45135.

If the expenditure incurred would otherwise qualify for capital allowances, a deduction should still be allowed under this section, rather than by way of capital allowances, if the conditions outlined above are met. However, if a deduction is available under this provision then capital allowances may not also be claimed for the expenditure.