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HMRC internal manual

Capital Allowances Manual

IBA: Qualifying trade: Welfare buildings


A building provided for and in use for the welfare of workers employed in a qualifying trade qualifies for IBA unless it is caught by the excepted use exclusion. For example, a factory owner may provide a grocery shop so that workers who cannot get to shops during normal working hours may buy food. The shop has been provided for the welfare of the workers but it does not qualify for IBA because use as a shop is excepted use.

A building must be provided for the welfare of workers and not employees generally to qualify for IBA. Workers are employees who are directly engaged in the productive, manufacturing or processing sides of a business. Office staff and management are not workers for the purposes of this legislation. This means that a canteen provided for assembly line workers will qualify for IBA while a canteen provided for office staff will not. If there is mixed use of a welfare building the building will qualify for IBA provided that the use by workers is not negligible. This follows from the case of Saxone Lilley and Skinner CA32315.

Examples of buildings that may be welfare buildings if they are provided for workers are:

  • canteen,
  • day nursery,
  • garage,
  • hard tennis court,
  • hostel,
  • indoor sports hall.