SBA was introduced with effect from 29 October 2018, aiming to relieve costs for new structures and buildings used for qualifying purposes. A business must hold an allowance statement containing certain information to be eligible to claim SBA.

Current law for SBA is included in Part 2A Capital Allowances Act 2001 (CAA01), inserted by Statutory Instrument 2019 No 1087. The allowance statement requirement is contained within section 270IA CAA01. An ‘allowance statement’ means a written statement, which must include the following information:

• information to identify the building to which it relates
• the date of the earliest written contract for the construction of the building
• the amount of qualifying expenditure incurred on its construction or purchase
• the date the building is first brought into non-residential use.

When the relevant interest in a building is acquired, the seller must pass the allowance statement (or a copy) to the purchaser, so that the purchaser can claim SBA.

A business must hold an allowance statement to claim SBA, which includes certain details such as the date the asset is first brought into non-residential use, which is normally the date the SBA allowance period of 33 and one-third years commences.

However, where qualifying expenditure is incurred after the asset is brought into qualifying use or treated as incurred under the simplification rules, the allowance period starts at a later date. The legislation requires the allowance statement to include the date qualifying expenditure is incurred in situations where the allowance period commences from this later date.

HMRC manual CA94600 includes an example on what should be included in an allowance statement.