RSM comments on generous capital allowances changes announced in Budget

The recent Budget announced a package of measures designed to encourage business investment in UK real estate by both investors and occupiers.  

The newly introduced Structures and Buildings Allowance (SBA) will provide tax relief for the cost of constructing, acquiring or refurbishing buildings or structures which will be used for commercial purposes. Previously, businesses could claim tax relief on the cost of certain items within a building (plant and machinery, integral features) but not for the cost of the building/structure itself. For occupiers, this will reduce the effective cost of fitting out or refurbishing their premises, while for investors the additional tax relief will increase the post-tax yield on a property. The SBA is intended to be available for works where the contract between client and contractor/builder was entered into after 29 October 2018.

This is a new and potentially valuable tax relief that should affect any business incurring capital expenditure on buildings and structures. It is particularly important that any businesses planning capital expenditure consider the tax implications as early as possible and ensure that expenditure qualifying capital allowances, including the SBA, is maximised to ensure they gain the relief as quickly as possible. There are a number of key points businesses should consider: 

  • Do you own, occupy or invest in commercial property?
  • Are you planning to expand, relocate or refurbish your existing premises?
  • Do you pay UK income/corporation tax on your profits?

If the answer to each of the above is yes, these new changes are likely to affect you.

For further information please contact Rupert Guppy in our specialist capital allowances team.

This feature was produced in collaboration between Bisnow Branded Content and RSM U.K. Bisnow news staff were not involved in the production of this content