Capital Allowances Act 2001

[F1 270GB Additional VAT liabilities U.K.

(1) This section applies if—

(a) a person is entitled to an allowance under this Part by reference to qualifying expenditure incurred by that person, and

(b) the person incurs an additional VAT liability in respect of the qualifying expenditure.

(2) Subsection (3) applies for the purposes of calculating an allowance under this Part to which the person mentioned in subsection (1) is entitled—

(a) for the chargeable period in which the additional VAT liability accrues, and

(b) for any subsequent chargeable period.

(3) The amount of qualifying expenditure is treated as being increased, at the beginning of the chargeable period in which the additional VAT liability accrues, by the amount of the liability.

(4) If, immediately before the end of the period mentioned in section 270AA(2)(b) (the “allowance period”), the person who is entitled to an allowance under this Part by reference to qualifying expenditure is the person who incurred that expenditure, that person is entitled to an additional amount of allowance for the chargeable period in which the allowance period ends.

(5) The additional amount of allowance is the amount of the difference between—

(a) the amount of the additional VAT liability, and

(b) the total amount of the allowance to which the person has been entitled during the allowance period in respect of the additional VAT liability.

(6) But if an additional VAT rebate is made to the person in respect of the qualifying expenditure by reference to which this section applies, subsection (5) is subject to section 270GC(4) (limit on total allowance).]

Textual Amendments

F1 Pt. 2A inserted (5.7.2019) by The Capital Allowances (Structures and Buildings Allowances) Regulations 2019 (S.I. 2019/1087), regs. 1, 2