Capital Allowances Act 2001 section 270GB

Additional VAT liabilities

Section 270GB deals with how an additional VAT liability arising after the original qualifying expenditure was incurred is treated for the purposes of structures and buildings allowances.

• Where a person entitled to a structures and buildings allowance incurs an additional VAT liability on their qualifying expenditure, the amount of that expenditure is increased by the liability amount from the start of the chargeable period in which it accrues.
• The increased qualifying expenditure figure is used to calculate the allowance for the period in which the additional VAT liability accrues and for all subsequent chargeable periods.
• If the original spender still holds the allowance entitlement at the end of the allowance period, they can claim a top-up allowance equal to the difference between the additional VAT liability and the total allowances already given in respect of that liability during the allowance period.
• If the person also receives an additional VAT rebate on the same qualifying expenditure, there is a cap on the total allowance that can be claimed, as set out in the rules on additional VAT rebates.