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HMRC internal manual

Capital Allowances Manual

Business Premises Renovation Allowance: Grants affecting entitlement to allowances

CAA01/Section 360

Expenditure does not qualify for an initial allowance or WDA to the extent that it istaken into account for the purposes of

  • a notified State aid other than BPRA, or
  • a grant or subsidy which is not a notified State aid but which is declared by Treasury order to be relevant for the purposes of withholding initial allowance or WDAs,

A notified State aid is a State aid notified to and approved by the EuropeanCommission.

If the grant or payment is made after an initial allowance or WDA has been made theallowance is withdrawn to that extent.

If the person receiving the grant or payment repays it wholly or partly the grant orpayment is treated as if it had never been made to the extent that it is repaid.

Any assessments or adjustments needed to be made may be made within 3 years of the end ofthe chargeable period in which the grant, payment or repayment is made.


Cass incurs qualifying expenditure of £200,000 converting a disused shop into a coffeebar. She claims initial allowance of £200,000. The following year she discovers that shecould have got a government grant for the work and so she claims it. The grant is anotified state aid. She is given a grant of £50,000. £50,000 of the initial allowance iswithdrawn. If Cass repays the grant 2 years later she is given further relief of £50,000.