The Good News: A New Structures and Building Allowance
From 29 October 2018 HMRC has reintroduced a tax relief for the construction costs of structures and buildings called the Structures and Buildings Allowance (SBA). The relief is available on new non-residential structures and buildings or renovations/conversions of existing buildings. The relief will be at an annual rate of two percent on a straight-line basis i.e. you will be able to deduct the cost of such buildings against your profits over 50 years.
It will apply to any structures and buildings where a contract for the construction works was entered into on or after 29th October 2018.
Unfortunately, the detailed rules are not straightforward. The Chartered Institute of Taxation is appealing to the Government to consider simplifying these.
The Bad News: Reduction to Special Rate Pool Capital Allowances
Special rate pool assets writing down allowance is being reduced from 8% to 6% effective from 1 April 2019 for companies (6th April 2019 for businesses within the charge to income tax). A Hybrid rate will be used where a business’ chargeable period spans 1 April (or 6 April).