The Business Premises Renovation Allowance (BPRA), introduced in 2007 for a ten-year period, offers tax incentives to bring back into business use derelict premises or business properties unused for at least one year.
BPRA gives a 100 per cent allowance against corporation tax or income tax for certain expenditure incurred when converting or renovating premises in disadvantaged areas, including:
- building costs, e.g. the cost of labour and materials
- architectural and design services
- surveying or engineering services
- planning applications
- statutory fees and statutory permissions, e.g. the costs of building regulation fees, or getting listed building consent.
BPRA ends on 31 March 2017 for corporation tax and 5 April 2017 for income tax.
Premises on which BPRA has been claimed must be held for at least seven years from the date the premises were first used or were suitable for letting and if within that time certain events take place – e.g. the premises or sold, are no longer used for commercial purposes or are demolished – the initial tax relief can be reduced.
While BPRA offers commercial property owners and investors a potentially rewarding investment return with high tax relief, while contributing to regeneration, HM Revenue & Customs (HMRC) has said “it is aware of a number of tax avoidance schemes which aim to exploit BPRA”.
Milsted Langdon Chartered Accountants in Bath, Bristol, London, Taunton and Yeovil can provide expert advice on BPRA as part of commercial property investment projects to ensure compliance with HMRC and maximum tax benefits.