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HMRC internal manual

Capital Allowances Manual

IBA: enterprise zones: qualifying expenditure

Budget 2007 announced a business tax reform package including the gradual withdrawal of IBAs and ABAs over four years. Legislation was introduced in FA08 to give effect to those changes. The phased withdrawal of IBA writing down allowances had effect for chargeable periods ending on or after 1 April 2008 for businesses within the charge to CT and 6 April 2008 for businesses within the charge to IT. This phasing out does not apply to EZ WDAs. They continue in full until the cut-off date. There are no IBA writing down allowances for the financial year beginning on 1 April 2011 and subsequent years.

CAA01/S298 - S304

Expenditure incurred, or incurred under a contract entered into, within 10 years of the site of the building being included in an enterprise zone on constructing:

  • industrial buildings
  • commercial buildings, and
  • qualifying hotels


qualifies for an industrial buildings allowance at the special rate for buildings in enterprise zones.

For example, the Isle of Dogs enterprise zone was designated on 26 April 1982 and so construction expenditure incurred in the period 26 April 1982 to 25 April 1992 qualifies for enterprise zone allowances. Expenditure incurred in 1993 under a contract entered into on 15 March 1992 will also qualify because it was incurred under a contract entered into during the life of the zone.