Structures and buildings allowance: what to enter, year after year

Short version. The structures and buildings allowance is one amount in its own field, followed by three follow-up questions. Enter the figure from your allowance statement, tell us whether this is the first claim on the building, the qualifying expenditure on the building, and whether it was in qualifying use for the whole period, and we check the claim against the rate for your dates.

What the allowance is

The structures and buildings allowance, usually shortened to SBA, is tax relief on the cost of constructing, renovating or converting commercial structures such as offices, shops, factories and warehouses. Rather than arriving all at once, the relief is spread over 33 and a third years, a small slice each accounting period.

Three things it never covers. It never covers residential property, it never covers the cost of the land the structure stands on, and the spending never qualifies for the Annual Investment Allowance. HMRC sets out the boundaries in its structures and buildings allowance guidance.

Selling the building works differently from selling equipment. There is no balancing charge. Instead the buyer takes over the remaining claim through the allowance statement, and the allowances you claimed feed into the chargeable gain computation on a sale. That computation needs an accountant.

The rate for your dates

The rate is 3% a year now, and 2% a year for accounting periods before 1 April 2020. The allowance is never a flat 3% for every period, which is why we check your figure against the rate for your exact dates.

Two worked examples. A £400,000 build gives £12,000 a year at 3%, and £8,000 a year in a 2% period. If your period straddles 1 April 2020, the right figure sits between those two, weighted by the days on each side.

How to enter it in SimpleCompanyTax

The claim lives in the Tax adjustments section of the wizard. Select the “+ Add a structures and buildings allowance” opener and it reveals the Structures and buildings allowance amount field, which we file in box 711 of the CT600.

Three follow-up questions appear under the amount:

• “Is this the first claim on this building?”
• “Qualifying expenditure on the building”
• “Was it in qualifying use for the whole period?”

The allowance is additional to the equipment fields, not an alternative to them. If the company also bought computers, tools or a van, claim those in their own fields as usual and enter the building claim here on top.

Why we ask for the building cost every year

We ask for the qualifying expenditure on every claim, not just the first one, because we check your yearly allowance against the rate ceiling on the building cost, for every claimant. A later claimant still has the figure to hand, because the allowance statement that passes with the building carries the original cost (HMRC’s Capital Allowances Manual, CA94650).

Box 771 is a separate matter. That box prints the qualifying expenditure once, from a first claimant, which is why the box tag next to the field only shows when you answer yes to the first-claim question. The question and the box are two different things. We always need the cost for our check, and box 771 only carries it on a first claim.

A rule of thumb for sense-checking your allowance statement: at 3% the cost is roughly 33 times the allowance, and at 2% roughly 50 times.

The whole-period use question

The allowance builds up daily, and only while the building is in qualifying business use. Our check assumes the building was in qualifying use for the whole accounting period. If it was only in use for part of the period, that assumption would make the check too generous, and we do not collect the date the building came into use.

That is why answering “No, or not sure” blocks the return, and so does leaving the question unanswered, because an unconfirmed assumption is still unconfirmed. The panel you will see says: “A structures and buildings allowance accrues only while the building is in qualifying use, and we have not been told it was in qualifying use for the whole period. We cannot check a part-period claim, so we cannot file this return.”

The fix depends on the facts. If the building genuinely was in qualifying use for the whole period, answer yes and carry on. If it was not, an accountant computes and files the part-period claim.

The allowance statement

You cannot claim the allowance at all without a written allowance statement. It records the building, the date it first came into qualifying use and the qualifying expenditure, and it is where the figure you enter comes from. Whoever incurred the construction cost prepares it, and it stays with the building for the life of the claim.

When the building is sold, the statement passes to the buyer with the building, so the buyer can carry on the remaining years of the claim. If you bought a building part-way through its 33 and a third years, ask the seller for the statement before you claim anything.

What we do not work out for you, and why

• We do not compute the allowance. You enter the yearly figure from your allowance statement, and we check it against the ceiling for your dates.
• We do not apportion part-period use. That needs the date the building came into use, which we do not collect, so the whole-period question blocks instead.
• We do not handle the sale-year gain adjustment. The allowances you claimed feed into the chargeable gain computation when the building is sold, and that is accountant territory.

For a straightforward yearly claim, your allowance statement plus the GOV.UK guidance is usually enough. For anything else, speak to an accountant.

Related articles

• Capital allowances: what to enter covers the equipment fields that sit alongside this one.
• Why we cannot work out your Corporation Tax explains the blocking checks, including the whole-period use panel above.
• Long first accounting periods: an SBA claim in a first period longer than 12 months cannot be filed here, and do not simply leave it out, because unclaimed allowances can be lost.

This article is general guidance, not tax advice. Structures and buildings allowance claims turn on the paperwork and the dates, and the sale-year consequences reach into chargeable gains. If you are unsure, check the GOV.UK guidance or speak to an accountant.