Business Premises Renovation Allowances

Business Premises Renovation Allowances (BPRAs) were introduced by Finance Act 2005 and commenced on 11 April 2007. BPRAs are intended to give an incentive to bring derelict or unused properties back into use.

BPRAs give an initial allowance of 100% for expenditure on converting or renovating unused business premises or repairs to a qualifying business premises in a disadvantaged area.

Expenditure only qualifies for BPRAs when:

• the building is situated in a disadvantaged area
• the building has been unused for a year or more immediately before the conversion/renovation or repair begins
• the last use has not been a dwelling
• expenditure was incurred on or after 11 April 2007

Expenditure on acquiring land, extending a building or developing land next to a building does not qualify for BPRAs.

There is a balancing adjustment if there is a balancing event within 7 years of the first use of the building after conversion, renovation or repair. A balancing adjustment is a balancing allowance/charge. The main balancing events are the sale of the relevant interest and the grant of a long lease for a premium out of the relevant interest.

What is a disadvantaged area?

A “disadvantaged area” is an area specified as a development area by the Assisted Areas Order 2007 (SI 2007/107) together with the whole of Northern Ireland. If you know the postcode you can use the postcode database which is at http://www.bis.gov.uk/analysis/statistics/sub-national-statistics/assisted-area-look-up to find out if a building is in a disadvantaged area.

What are qualifying building premises?

Qualifying business premises are those used or available for letting to be used for a trade, profession, vocation or as an office but not those used as a dwelling or a relevant trade to include fisheries, shipbuilding and the coal and steel industry.

Capitus Regeneration & Sustainability can:

• Check and identify properties potentially qualifying for the relief
• Advise on management strategy for planned property refurbishments e.g. vacant floors in buildings
• Collate all cost and supporting construction information
• Prepare, submit and negotiate claims with HMRC either directly or through your existing accountant