Capital Allowances Act 2001 section 308

Grants affecting entitlement to initial allowances

Section 308 deals with how certain government grants and payments reduce or eliminate entitlement to initial allowances on capital expenditure.

• No initial allowance is available for expenditure to the extent it is covered by a relevant grant or payment declared by the Treasury
• If a relevant grant or payment is received after an initial allowance has already been given, that allowance must be withdrawn to the corresponding extent
• If the recipient repays the grant or payment (in whole or in part) to the grantor, the grant or payment is treated as never having been made to that extent, restoring the allowance
• HMRC has up to 3 years from the end of the chargeable period in which the grant, payment or repayment was made to make any necessary assessments or adjustments