When was the structures and buildings allowance introduced?
SBA was first introduced in October 2018 for qualifying expenditures on commercial buildings or structures. Originally, the tax benefit was spread over a 50-year period at a rate of 2% a year. However, this was improved from April 2020 to its current structure of 3% over 33 and one third years.
What are Structures & Buildings Allowances (SBA)?
SBA allows businesses to claim tax relief against expenditures made on commercial or business-related structures by mitigating tax against profits.
This is a type of tax relief that is claimed against capital businesses spend on structures and can help businesses to grow and expand.
What type of buildings and structures qualify for SBA?
Commercial buildings are the primary type of structure that qualifies for structures and buildings allowance. Buildings or business-related structures must be used for business purposes.
In addition, the person or persons who are claiming SBA must have an interest in the land where the building or structure is located e.g. leasehold or freehold.
Qualifying activities for SBA
SBA applies to expenditure on commercial buildings which are used for qualifying business purposes. This can typically include:
- Offices
- Retail premises
- Wholesale premises
- Warehouses
- Factories
- Business-related structures such as tunnels and walls
What type of expenditure qualifies for SBA?
- Capital expenditure on renovations on already existing commercial buildings or structures
- Capital expenditure on converting already existing commercial buildings or structures
- Construction costs of a new property
- Associated costs with the construction of a new commercial property
- Specific demolition costs
- Specific costs which relate to alterations to the land
When is SBA claimable?
To make a claim, certain timing conditions must be met:
- A claim will be available from the later of either when the building or structure was first brought into qualifying use, or
- The day on which the qualifying expenditure is incurred.
Specialist support with structures and buildings allowance
Our expertise and knowledge mean we are specialists when it comes to SBA, and helping businesses claim this kind of capital allowance. Take a look at our expert team.
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