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Renewals on rails

22 October 2013 / Mike Truman
Issue: 4425 / Categories: Comment & Analysis , Business

HMRC’s supposed abolition of the renewals basis concession is nothing of the sort


  • 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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