Capital Allowances Act 2001 section 360B

Meaning of "qualifying expenditure"

Section 360B defines "qualifying expenditure" for the purposes of business premises renovation allowances, setting out the conditions that must be met, the types of spending that qualify, and the categories of expenditure that are excluded.

• Qualifying expenditure is capital expenditure incurred before the expiry date (five years from the appointed day, or a later Treasury-prescribed date) that meets both Condition A (conversion, renovation or incidental repairs to a qualifying building) and Condition B (spent on building works, professional services, planning applications or statutory fees), with a 5% tolerance for miscellaneous items outside Condition B
• Excluded expenditure covers land acquisition, building extensions (other than for access), development of adjoining land, and plant and machinery — unless the plant or machinery is a fixture of a type listed in the legislation, such as integral features, fire safety installations, building management systems, cabling, sanitary fittings, kitchen facilities, signs or alarm systems
• Expenditure is also excluded to the extent it exceeds the arm's length market value of the works or services concerned, or where the qualifying building has been in use at any point during the 12 months before the expenditure is incurred
• Repair costs that would not be deductible as revenue expenditure in computing the profits of a property business, trade, profession or vocation are treated as capital expenditure for these purposes, and the Treasury has power to amend the fixture list or make further provision about qualifying expenditure by regulations