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For years you have been able to claim tax relief for the cost of equipment installed within or on buildings, such as shop fittings, but not for the cost of the building itself. That changed from 29 October 2018.

You can now claim a Structures and Buildings Allowance (SBA), which is equal to 2% of the cost of acquiring or constructing a commercial building that is used for your business. You must incur the costs on or after 29 October 2018, and any construction contract must have been signed on or after that date.

You can claim the SBA on a range of costs including building, renovating, repairing, fitting out, site preparation and design. If you buy a newly constructed commercial building that should qualify, but in that case the SBA is calculated on the lower of the construction costs and what you paid for the whole building.

To make a claim for the SBA you need to have received an “allowance statement” for the building. The first business that uses the building creates the allowance statement and passes it on to the next user when the building is sold. An allowance statement is also needed for any new extensions or renovations completed for existing structures.

Your conveyancing solicitor should ask for the allowance statement as part of the deeds when you acquire a commercial building.
You can’t claim the SBA on the costs of any residential properties, including buildings located in the grounds of a residence such as a home office. Properties used for furnished holiday lettings or for residential letting don’t qualify for the SBA.

You should submit your SBA claim as part of your Corporation Tax return, or Income Tax return for an unincorporated business. We can help you do that, but don’t forget to tell us how much you have spent on any commercial buildings since 29 October 2018.

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Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD. Registered Number OC309225.
The firm is registered to carry on audit work in the UK & Ireland. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001178544. The professional rules applicable are the Audit Regulations and Guidance which can be found at www.icaew.com/regulations, and the International Standards on Auditing (UK and Ireland) which can be found at www.frc.org.uk/apb/publications/isa.cfm.