Industrial Building Allowance

Industrial Building Allowance

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Hi everyone,

I have a new self employed client who's form of income is rental income......he rents some units / old stables that are on his dad's land and pays him a small amount each month for them, my client then rents them out to his own customers as storage space, he also rents containers that he leases from a supplier. In 2013/14 tax year he purchased a new steel building for approx. £14,000 as additional rental storage space and I'm not sure how to handle this in the accounts, do I claim the IBA allowance each year or can I claim capital allowance for the full amount as its not a fixed building ...........

Thank you.

Replies (13)

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By User deleted
11th Apr 2014 18:06

You need to bring yourself up to date

IBAs were abolished years ago

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By lionofludesch
11th Apr 2014 18:22

2012

Abolished in 2012, phased out over the previous three years.

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By User deleted
11th Apr 2014 18:33

I thought ...

... it was 2011, but what difference does a year make ;¬)

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By lionofludesch
11th Apr 2014 18:42

It was .....

..... a long time ago.   I can't remember.

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By Lisa1968
11th Apr 2014 18:58

Thank you for the reply's, didn't think i'd heard about it before, must have been an old google post ;-)  so can I claim the full cost then as capital allowance for the steel building.

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By User deleted
11th Apr 2014 19:20

Why ...

... do you think you'll be able to claim allowances on the building?

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By GuestXXX
17th Mar 2015 16:33

.

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By Lisa1968
12th Apr 2014 07:38

It is a prefabricated building,  I maybe giving this way to much thought, unfortunately I'm quite new to this, everything else is quite simple and straight forward for my client except this steel building ;-) I just need some guidance on how I handle it in the accounts...... please be gentle :-)

 

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By User deleted
12th Apr 2014 07:53

Accounts treatment should be straightforward

Tangible fixed asset.

As for the tax treatment, you need to consider whether it qualifies as plant. I suspect not, though there may be some fixed plant within it (lighting, heating etc) on which allowances can be claimed. I suspect, though, that it's little more than a shell. Is it easily moveable?

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By Lisa1968
12th Apr 2014 10:04

I think it would be moveable, I'd have to check with him,  how much would you advise I depreciated it, I know this gets added back on for tax purposes but what would you recommend, I've read that buildings are depreciated by 2% per year, would this apply to this kind of building?? 

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By davidholroyd41
12th Apr 2014 10:34

You need
To determine exactly what your client bought. Is it a metal container? Is it a building made of metal? Until you know what it is, it is difficult to form a view as to whether it will qualify as P&M. As far as the depreciation rate is concerned you need to be able to come to some reasonable assumption as to its likely lifespan. Real buildings made from bricks and mortar are often depreciated over 50 years but I doubt that rate will be reasonable for a steel building that will undoubtedly have a far lesser anticipated lifespan.

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By Lisa1968
12th Apr 2014 12:40

Not a container

Hi David, no its not a container but a prefabricated building, I have found out that a mechanic rents it out to do his work from, so it will have lighting in it etc.

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By lionofludesch
14th Apr 2014 08:52

I think you've got it, Lisa1968

You've said more than once that it's a building.

So it's more than likely that it's a building, not plant.

But - as BKD said - it may well have plant in it.

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