Capital Allowances Act 2001 section 270GD

Adjustment for pre-April 2020 allowance

Section 270GD provides a mechanism to compensate taxpayers for the difference in the structures and buildings allowance rate that applied before April 2020, by granting an additional allowance at the end of the allowance period.

• When the SBA rate increased from 2% to 3% in April 2020, allowances already claimed at the lower rate resulted in a shortfall over the life of the asset
• An additional "top-up" allowance of 1% of the qualifying expenditure, adjusted for the number of days allowances were claimed at the old rate, is given at the end of the allowance period
• The top-up is calculated as 1% × qualifying expenditure × D/365, where D is the number of days from 29 October 2018 to the relevant date on which allowances were actually claimed
• The relevant date is 5 April 2020 for income tax purposes or 31 March 2020 for corporation tax purposes