Capital Allowances Act 2001 section 360Y

Additional VAT rebates and writing off qualifying expenditure

Section 360Y deals with the treatment of additional VAT rebates received in connection with qualifying expenditure for research and development allowances.

• When a business receives an additional VAT rebate relating to qualifying expenditure, the rebate amount must be written off against that expenditure.
• The write-off takes effect at the time the rebate accrues to the business.
• The amount written off equals the full amount of the VAT rebate received.
• This ensures the qualifying expenditure balance is reduced to reflect the fact that the business has recovered some of its costs through the VAT rebate.