Structures and buildings allowance

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

What is structures and buildings allowance (SBA)?

From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA.

Except where the enhanced rate for freeport tax sites applies, SBA is given at an annual rate of 3% (from 1 April 2020 for corporation tax and 6 April 2020 for income tax, prior to April 2020 the rate was 2%), of the qualifying expenditure on a straight-line basis over 33 and 1/3 years, as a deduction in calculating the taxable profits of a trade or other qualifying activity.

The 3% rate can be claimed on all expenditure, even where the building or structure was bought into use before April 2020. Where a chargeable period spans 1 April 2020 (corporation tax) or 6 April 2020 (income tax) the rate of 2% will apply for days before the relevant date and 3% for the days after that date. Any shortfall in allowances due to a business claiming 2% prior to April 2020 can be

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