Have you overlooked this valuable capital allowance?

If you have invested in a new commercial building or carried out significant renovation work, you may have overlooked a valuable capital allowance. The Structures and Buildings Allowance (SBA) provides tax relief on qualifying capital expenditure incurred on certain new non-residential structures and buildings.

The SBA applies to qualifying costs incurred when constructing, purchasing or renovating qualifying commercial structures. This can include expenditure on design fees, site preparation, construction works, renovation, conversion and fitting-out costs.

The allowance was introduced in October 2018 at a rate of 2% per year on a straight-line basis. From April 2020, the annual allowance rate increased to 3%, with relief available over a period of 33 and one third years. This rate continues to apply for qualifying expenditure.

To qualify, the structure or building must be used for a qualifying business activity, such as a trade, profession, property business (excluding residential property), or certain other commercial activities. The structure must also meet specific conditions, including having an allowance statement to support the claim.

Claims are made through your tax return, and the relief can generally continue for the full allowance period where the qualifying conditions continue to be met. If you have constructed, purchased or renovated a commercial property since October 2018, it is worth reviewing whether you are claiming all the capital allowances available to you.