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HMRC’s supposed abolition of the renewals basis concession is nothing of the sort
KEY POINTS
- ESC B1 does not set out the renewals basis it provides for its interaction with capital allowances.
- HMRC guidance is based on TA 1988 s 74(1)(d) carried forward in to ITOOIA 2005 s 68.
- The Caledonian Railway Company successfully claimed renewals on rolling stock under this section’s predecessor.
- Renewals basis can therefore only be abolished if the legislation is amended.
The renewals basis apart from where it is applied to loose tools etc is non-statutory. Following the well-known principles in Wilkinson [2005] UKHL 30 HMRC had no alternative but to withdraw it.
They did so by announcing that extra-statutory concession (ESC) B1 was to be abolished with effect from 6 April (or for companies 1 April).
Every single one of the statements in the above...
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