CIOT urges government to simplify Structures and Buildings Allowance

Structures and Buildings Allowance

The Chartered Institute of Taxation (CIOT) has urged the government to simplify its new Structures and Buildings Allowance (SBA).

The Structures and Buildings Allowance provides relief for expenditure on certain new, non-residential structures and buildings. Eligible construction costs incurred on or after 29 October 2018 will qualify for relief: this will be at an annual rate of 2%, on a straight-line basis. If a contract was entered into before this time, relief will not be available.

In a recent report, the CIOT stated that the current SBA rules are too complex, and that they over-complicate matters for taxpayers.

According to the CIOT, the SBA creates new categories of expenditure, which will have to be identified and tracked for tax purposes. The Institute has urged the government to remove much of the detail and complexity from the current proposals in order to help eliminate confusion amongst taxpayers.

Commenting on the matter, John Cullinane, Tax Policy Director at the CIOT, said: We urge the government to consider whether a simpler, more streamlined approach to the SBA is possible. The policy aims could have been achieved by a simpler approach of incorporating the relief for this expenditure into the existing capital allowances available.