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Readers may be wondering about an apparent inconsistency in Clause 70 of the new Finance Bill.
Budget Note 7 sets out the proposed changes to capital allowances legislation by creating a new category of allowances for integral features at a reduced rate of 10% per annum.
The assets to be treated as integral are described as:
- Electrical systems (including lighting systems)
- Cold water systems
- Space or water heating systems, powered systems of ventilation, air cooling or air purification, and any floor or ceiling comprised in such systems
- Lifts, escalators, and moving walkways
- External solar shading
- Active facades
However, Clause 70's list does not include active facades — and this initially raised concern that the creation of energy efficient buildings was not being fully supported.
It transpired that this omission was because HMRC consider active facades to already qualify under 'part of air cooling or heating systems'.
The Revenue explained: 'In the process of tightening up the definition of active facades for the publication of the Finance Bill, it became clear that businesses can already claim allowances on active facades under the current rules and will continue to be able to do so without including them in the list of assets separately.
'Active facades qualify by virtue of being considered part of the air cooling or heating systems of the building.
'Because expenditure on a facade reduces the amount of equipment needed to heat or cool the building, inspectors in the LBS have allowed plant and machinery allowances on them.'
