Business Premises Renovation Allowance

Business Premises Renovation Allowance (BPRA) is a tax allowance provided by HMRC in UK to provide an incentive to renovate derelict or unused properties and bring them back into use. Provided the business premises thus converted or renovated is in a disadvantaged area, 100% of the qualifying expenditure can be claimed as capital allowance. BPRA will be in effect only for a period of five years from April 11, 2007 to April 10, 2012 and the expenditure must be incurred during this period.

A disadvantaged area is any area included in The Assisted Areas Order 2007 or Northern Ireland. Areas such as North Cornwall and Isles of Scilly in England and Swansea and Pembrokeshire in Wales are included in the 2007 order. Just enter the area’s postcode at Postcode Database of Assisted Areas website to check whether it qualifies.

To qualify for BPRA, the expenditure must be incurred:

• To convert or renovate a commercial building or structure situated in a disadvantaged area into a “qualifying” business premises
• To repair qualifying business premises

Qualifying business premises are commercial buildings that are presently unused and have not been used during one year preceding the incurrence of the expenditure. The last use must also not have been as a dwelling. Expenditure for conversion, renovation and repairs of such a building will qualify for BPRA provided it is used or let out for a “relevant trade,” i.e. for:

• Fisheries and aquaculture,
• Shipbuilding,
• Coal industry,
• Steel industry,
• Synthetic fibres,
• Primary production of certain agricultural products, and
• Manufacture or marketing of products which imitate or substitute for milk and milk products.

Any expenditure for acquiring land, extending the building or developing land next to the building does not qualify, however.

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