Budget 2020 - Increase in Structures and Buildings Allowance from 2% to 3%

Budget 2020 – Increase in Structures and Buildings Allowance from 2% to 3%

Wed 11 Mar 2020

The 2020 Budget announced that the Structures and Building Allowance (“SBA”) will increase from 2% to 3%. The change will take effect from 1 April 2020 for corporation tax and 6 April 2020 for income tax. For accounting periods that straddle these dates, the new rate will be prorated.

Commenting on the new Government’s plans to increase the rate of SBA from 2% to 3%, Prasam Patel, Mazars Real Estate Tax Director, commented: “This increase in relief, while modest in absolute terms, provides accelerated relief on spending on commercial buildings as well as infrastructure such as, roads, ports, car parks etc”.

The SBA is an allowance that currently provides relief of 2% per annum (on a straight-line basis for 50 years) for companies on eligible expenditure incurred on constructing or converting commercial structures and buildings. The relief is eligible for costs incurred on or after 29 October 2018.

The relief is available on eligible expenditure incurred in constructing or converting commercial structures and building in the UK or overseas, where the UK company holds an interest in the relevant building or structure, and the structure or building is within the charge to UK tax.

For more information on this please contact Prasam Patel at prasam.patel@mazars.co.uk

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