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HMRC internal manual

Capital Allowances Manual

IBA: how allowances and charges are made: trades

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.


IBA is normally made to traders. Where a person carries on a trade, treat allowances as expenses of that trade and charges as trade receipts.

Buildings in enterprise zones may be in use for a trade, profession or vocation. Treat enterprise zone allowances as expenses and charges as receipts of the trade, profession or vocation.