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HMRC internal manual

Capital Allowances Manual

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HM Revenue & Customs
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General: Contributions: Contributions that are repaid

Extra Statutory Concession B49 (ESC/B49)

Sometimes the recipient of a grant may repay all or a part of it. Where they do there is nothing in the legislation that lets them claim capital allowances on their true net expenditure. ESC/B49, which was withdrawn from 1 April 2013 for the purposes of Corporation Tax and 6 April 2013 for the purposes of Income Tax, allowed a person who had repaid all or part of a grant that had been deducted from expenditure qualifying for capital allowances to claim capital allowances on the amount repaid if:

  • the grant was made by the Crown, any Government or any other public or local authority, or
  • the repaid grant is taxable in the hands of the person who made the grant as a balancing adjustment or a revenue receipt.

 

These were the only cases where a person repaying all or part of a grant could have been given capital allowances on the amount repaid. Since ESC/B49 has been withdrawn you should refuse to give capital allowances in all cases on a grant repaid because there is nothing in the legislation to allow them.