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HMRC internal manual

Capital Allowances Manual

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HM Revenue & Customs
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IBA: highway undertakings: how IBA conditions are satisfied

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. There are no IBA writing down allowances for the financial year beginning on 1 April 2011 and subsequent years.

A person carrying on a highway undertaking is treated as carrying it on by way of trade and as occupying any road on which it is carried on. If the person who builds a road was not entitled to an interest in it when the construction expenditure was incurred but was entitled to a highway concession, the highway concession is the relevant interest. This means that a person who is entitled to a highway concession and builds a road can claim IBA on the construction expenditure.