CA45700 - Business Premises Renovation Allowance: Grants affecting entitlement to allowances

Note: The BPRA guidance has not been updated to reflect the amendments made by s.66 FA 2014 which came into effect on 6 April 2014 for income tax purposes and 1 April 2014 for corporation tax purposes.

CAA01/Section 360L

Expenditure does not qualify for an initial allowance or WDA to the extent that it istaken into account for the purposes of

• a notified State aid other than BPRA, or
• a grant or subsidy which is not a notified State aid but which is declared by Treasury order to be relevant for the purposes of with holding initial allowance or WDAs,

A notified State aid is a State aid notified to and approved by the European Commission.

If the grant or payment is made after an initial allowance or WDA has been made the allowance is withdrawn to that extent.

If the person receiving the grant or payment repays it wholly or partly the grant or payment is treated as if it had never been made to the extent that it is repaid.

Any assessments or adjustments needed to be made may be made within 3 years of the end ofthe chargeable period in which the grant, payment or repayment is made.

Example

Cass incurs qualifying expenditure of £200,000 converting a disused shop into a coffee bar. She claims initial allowance of £200,000. The following year she discovers that she could have got a government grant for the work and so she claims it. The grant is anotified state aid. She is given a grant of £50,000. £50,000 of the initial allowance is withdrawn. If Cass repays the grant 2 years later she is given further relief of £50,000.