Business Premises Renovation Relief


Who can claim?

Companies bringing qualifying business premises in designated disadvantaged areas back into business use.

Which are the designated areas in Ipswich?

The wards of Alexandra, Gipping, Holywells and Priory Heath.

What is the relief?

An initial tax allowance for qualifying capital expenditure on the renovation, conversion or repair of business properties that have been vacant for a year or longer before the renovation commences and are situated in designated disadvantaged areas.

How is the relief given?

100% tax deduction of qualifying renovation costs against trading (or rental business) profits.  Companies can reduce the initial allowance claimed to less than 100% of the eligible expenditure, in which case, annual allowances of up to 25% of the eligible expenditure are available in the following periods.

Are there any time limitations?

Qualifying expenditure must be incurred before 31 March 2017.

What conditions must be met?

  • The building must be in a designated disadvantaged area
  • The building must have been empty for at least a year before renovation commenced
  • The building must have last been used in a trade or as an office, and must not last have been used (in whole or in part) as a dwelling
  • After the renovation the building must remain a business premise (ie used in a trade or as an office, or available for letting as such, and not used, in part or in whole, as a dwelling)

What types of expenditure qualify for relief?

  • Building works
  • Architectural or design services
  • Surveying or engineering services
  • Planning applications
  • Statutory fees or permissions
  • Other expenditure (e.g. project management) may qualify, providing it does not exceed 5% of building works, architectural design services and surveying or engineering services
  • No relief is available for the acquisition or development of land, the extension of a qualifying building or the acquisition of plant and machinery (excluding plant and machinery that is a specified fixture)

Can the relief be clawed back?

Yes, if business use ceases within the five years following the renovation and when the renovated building was made available for use.

For further information on any of the issues discussed please contact Robert Leggett, John Matthews, Ann Minson or Andrew Scott.

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