Capital Allowances Act 2001 section 360X

Additional VAT rebates and balancing adjustments

Section 360X deals with how additional VAT rebates on qualifying expenditure are treated for the purposes of balancing adjustments under the flat conversion allowances regime.

• An additional VAT rebate received by the person holding the relevant interest counts as a balancing event, but with restricted consequences.
• No balancing allowance can arise from the receipt of an additional VAT rebate.
• A balancing charge only arises where the rebate exceeds the remaining residue of qualifying expenditure, or where there is no residue left at all.
• The balancing charge is limited to the excess of the rebate over the residue, or, if there is no residue, the full amount of the rebate.