Structures and buildings allowance is too complex

The Chartered Institute of Taxation is appealing to the government to consider simplifying the planned structures and buildings allowance (SBA).

Announced by the chancellor in the 2018 Budget the institute welcomes the policy objective to encourage investment in the construction and renovation of buildings intended for commercial use. But it says the proposals for the allowance over complicate matters for taxpayers.

Suggesting a more straightforward and streamlined approach John Cullinane CIOT tax policy director said: ‘The policy aims could have been achieved by a simpler approach of incorporating the relief for this expenditure into the existing capital allowances available.’

The CIOT suggests that the aim of incentivising investment could be achieved by giving the SBA to the person who incurs the expenditure at the rate of 2% over 50 years. This would remove the complexities on the future use of the structure or building or those arising as a...