One of the Autumn Budget 2018 measures was the introduction of a new structures and buildings allowance (SBA). The SBA allows for tax relief on qualifying capital expenditure on new non-residential structures and buildings. The relief will therefore apply to the costs of building new commercial structures.

The relief was introduced with effect from 29 October 2018 and applies where all contracts for the physical construction works are entered into on or after that date. The relief is available at an annual rate of 2% on a straight-line basis (over 50 years). No relief will be available where parts of the structure qualify for other allowances, such as Plant & Machinery allowances.

A new policy paper has recently been published by HMRC and provides further details on the workings of this relief. The draft legislation necessary for the introduction of the SBA was laid before the House of Commons on 17 June 2019.

According to HMRC, the SBA will support business investment in constructing new structures and buildings including necessary preparatory costs, and the improvement of existing ones, as well as improving the international competitiveness of the UK’s capital allowances system.