Business Premises Renovation Allowances (BPRAs)
Following years of delay, this relief is now fully operational. It provides a substantial incentive to bring qualifying business premises back into use, if they have been vacant for more than one year.
Issue
The Government is keen to encourage the regeneration of commercial centres in deprived areas of the UK. This relief is one of a series of measures designed to address the problems of empty commercial property, including restriction of business rates relief on empty property. BPRAs aims to help bring unused property back into business use and to target specific UK locations where regeneration is most needed.
Relief
BPRAs offer a 100% allowance for UK taxpayers incurring qualifying expenditure on renovating commercial buildings such as factories, offices or shops in designated disadvantaged areas (Assisted Areas) which have been empty for more than one year. Converting residential property into commercial property is not eligible for BPRAs. Once renovated or converted, the commercial property must be used or be suitable for letting, be used for the purposes of a trade/profession or used as an office. Developers, holding and renovating property on trading account will not be eligible for the relief. The relief is available for expenditure incurred between 11 April 2007 and April 2017. BPRAs relief is not available for expenditure incurred to acquire land, extend or develop adjoining land. Additionally, some BPRAs may be reclaimed if the property is sold, demolished, etc within seven years of its first use.
Assisted Areas
These are spread throughout the UK and include:
- All Northern Ireland and several Local Authority areas in Scotland and Wales;
- Local Authority wards in Yorkshire, Wirral, West Midlands and Cornwall;
- Some city centres including certain areas of Birmingham;
For full details of the assisted areas as defined for the purposes of the BPRAs scheme please click here
Approach:
We are a team of tax qualified property professionals with senior level experience at the Big 4 Accountancy firms. As a result, we understand the development issues, and all the tax and accounting aspects of construction projects. We are specialists who can work alongside your own tax and project advisers. Offering a complete service, we can undertake feasibility and entitlement reviews through to claim preparation and securing the best possible claims with HMRC.
Example
Qualifying expenditure of £200,000:
| |
with BPRAs | with no BPRAs |
| Profits |
£1,000,000 | £1,000,000 |
| BPRAs |
£(200,000) | |
| |
£800,000 | |
Tax payable
(at 23% large companies tax rate) |
£184,000 | £230,000 |
23% cash saving
= £46,000 |