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HMRC internal manual

Capital Allowances Manual

HM Revenue & Customs
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IBA: Qualifying trade: Garages and vehicle repair workshops

A vehicle repair workshop is used for a qualifying trade because it is used for a trade of maintaining or repairing goods. However, most vehicle repair workshops do not qualify for IBA because the use of most vehicle repair workshops is excepted use CA32310. It will be a building where retail trade or business, including repair work, is carried out.

A vehicle repair workshop will not be caught by the excepted use exclusion and so will qualify for IBA if all of the following conditions are satisfied:

  1. it is completely separated from the rest of a motor dealer’s premises;
  2. it does not include the reception area for cars;
  3. it is a place to which access by the public is discouraged.

The workshop does not need to be in a separate building for (a) to be satisfied and IBA to be available. If it is part of a larger building the first condition will be satisfied provided that it occupies a distinguishable part of the building and that part is not used to any material extent for anything other than vehicle repair.

In (c) the public means the ordinary retail customer. If customers are allowed into the workshop condition (c) is not satisfied.

Some firms fit tyres, exhausts, shock absorbers etc. but are not traditional repair workshops. You should deal with an IBA claim from one of them in the same way as an IBA claim from a traditional vehicle repair workshop. In particular, if customers are invited to inspect their vehicles before the work starts or after it is finished the use will be excepted use and no IBA will be due.