Capital Allowances Act 2001 section 351

Additional VAT rebates and writing off qualifying expenditure

Section 351 deals with how an additional VAT rebate affects the residue of qualifying expenditure for capital allowances purposes.

• When an additional VAT rebate is received relating to qualifying expenditure, the residue of that expenditure must be reduced accordingly.
• The amount written off equals the amount of the additional VAT rebate received.
• The write-off takes effect at the time when the rebate accrues, not when it is physically received.
• This ensures that capital allowances are only given on the net expenditure actually borne by the taxpayer after the VAT adjustment.