Contributed by ACCA, in their own words
The Finance Act 2014 will clarify the scope of Business Premises Renovation Allowance.
Business Premises Renovation Allowance (BPRA) is available to businesses that incur capital expenditure on bringing back into business use qualifying business premises in disadvantaged areas. Capital allowances of 100% may be claimed on qualifying expenditure.
The new legislation will apply from 1 April 2014 (6 April 2014 for unincorporated businesses) and seeks to ensure that only expenditure needed to bring the premises back into business use qualifies for BPRA.
BPRA will only be available for the actual costs of construction and building work and for certain specified activities such as architectural and surveying services. The legislation will also provide that additional associated activities (such as project management) qualify for relief, limited to 5% of the actual costs.
In addition:
- a rule will be introduced to prevent BPRA claims where additional state aid has or will be received
- the rule preventing relief for expenditure where the building has been unused for less than a year will be clarified
- where expenditure is paid for in advance and relief claimed immediately, the work must be completed within 36 months or the relief will be withdrawn
- the period in which balancing adjustments can arise will be reduced from seven to five years.