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HMRC internal manual

Capital Allowances Manual

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HM Revenue & Customs
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Plant and Machinery Allowances (PMA): buildings and structures: fire safety

CAA01/S29, FA08/S72

CAA01/S29, which specifically provided capital allowances on required fire precautions, is repealed for expenditure incurred on or after -

  • 1 April 2008 (for corporation tax purposes) and
  • 6 April 2008 (for income tax purposes).

 

This means that expenditure incurred by a person carrying on a qualifying activity in taking required fire precautions on or after 1 April 2008 (CT) and on or after 6 April 2008 (IT) does not qualify for PMAs unless it qualifies under the normal rules.

Expenditure on required fire precautions incurred before 1 April 2008 (corporation tax) and before 6 April 2008 (income tax)

Treat expenditure that does not already qualify for relief (either an allowance or deduction) that is incurred by a person carrying on a qualifying activity in taking required fire precautions in respect of premises used for the qualifying activity as qualifying expenditure for PMAs. For example, expenditure on a fire door can qualify under Section 29 but only if its installation is required by law.

Treat the trader as owning the plant or machinery as a result of incurring the expenditure. This means that the expenditure can qualify for PMAs. If there is a disposal event (CA23240) the disposal value is nil.

A person takes required fire precautions in respect of premises if the person takes steps specified in a notice served on the person under article 31 of the Regulatory Reform (Fire Safety) Order 2005 and the expenditure was incurred before 1 April 2008 (corporation tax) or before 6 April 2008 (income tax).

Prior to 1 October 2006 the relevant fire safety legislation was section 5(4) Fire Precautions Act 1971. Premises covered by the Fire Precautions Act 1971 included hotels and boarding houses, and factory, office, shop and railway premises where people are employed. Nursing homes were not designated as qualifying buildings for the purposes of Section 5(4) Fire Precautions Act 1971 and neither were schools or colleges

PMAs are also available on expenditure for which no relief is already available incurred:

  • in taking steps specified in a document sent by the fire authority; or
  • on fire safety work which has to be done following a Court Order under Section 10 Fire Precautions Act 1971, which prohibits the use of the premises until that work has been carried out.

 

The Regulatory Reform (Fire Safety) Order 2005 and the Fire Precautions Act 1971 do not cover Northern Ireland. Fire precautions expenditure incurred on premises in Northern Ireland qualifies for PMAs if it is incurred:

  • to comply with a notice under Article 26(4) Fire Services (Northern Ireland) Order 1984, or
  • in taking steps specified in a document sent by the fire authority for Northern Ireland, or
  • on fire safety work which has to be done following a Court Order under Article 33 Fire Services (Northern Ireland) Order 1984 that prohibits the use of the premises until that work has been carried out.

 

A lessor who makes a contribution towards their tenant’s expenditure on fire safety can claim capital allowances under CAA01/S538 (CA14500). The lessor may pay directly for the fire safety work rather than make a contribution. if so, you should give allowances to the lessor provided that the relevant notice has been served and the expenditure would have qualified for allowances if the tenant had incurred it.