Part 2

Plant and machinery allowances
Chapter 18

Additional VAT liabilities and rebates

Additional VAT liability

Additional VAT liability generates first-year allowance or annual investment allowance
236
1
Subsection (2) applies if—
a
the original expenditure was first-year qualifying expenditure, and
b
the additional VAT liability is incurred at a time when the plant or machinery is provided for the purposes of the qualifying activity.
2
The additional VAT liability is to be regarded for the purposes of this Part as first-year qualifying expenditure which—
a
is incurred on the same plant or machinery and is the same type of first-year qualifying expenditure as the original expenditure, and
b
entitles the person incurring the liability to a first-year allowance for the chargeable period in which the liability accrues.
3
Subsections (3) and (4) of section 52 apply to first-year qualifying expenditure constituted by the additional VAT liability as they apply to other first-year qualifying expenditure.
3A
Subsection (3B) applies if—
a
the original expenditure was AIA qualifying expenditure, and
b
the additional
VAT
liability is incurred at a time when the plant or machinery is provided for the purposes of the qualifying activity.
3B
The additional
VAT
liability is to be regarded for the purposes of this Part as AIA qualifying expenditure incurred on the same plant or machinery as the original expenditure in the chargeable period in which the liability accrues.
3C
Section 51A(7) applies to AIA qualifying expenditure constituted by the additional
VAT
liability as it applies to other AIA qualifying expenditure.
4
This section is subject to sections 237 and 241.
Pt. 2 modified (24.2.2003) by Proceeds of Crime Act 2002 (c. 29), s. 458(1), Sch. 10 para. 12 (with Sch. 10 para. 17(1)); S.I. 2003/120, art. 2, Sch. (with arts. 3 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)
S. 45H(2) modified (with effect in accordance with s. 167 of the amending Act) by Finance Act 2003 (c. 14) , Sch. 30 para. 7
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 4 para. 4 ; S.I. 2004/2575 , art. 2(1) , Sch. 1
Pt. 2 modified (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 9(2), 21(2) (with s. 38(2)); S.I. 2004/2575, art. 2(1) , Sch. 1
Pt. 2 restricted (5.10.2004) by Energy Act 2004 (c. 20) , s. 198(2) , Sch. 9 paras. 10, 22 (with s. 38(2) ); S.I. 2004/2575 , art. 2(1) , Sch. 1
Words in s. 236 heading inserted (with effect in accordance with Sch. 24 para. 23 of the amending Act) by Finance Act 2008 (c. 9), Sch. 24 para. 10(3)
S. 236(3A)-(3C) inserted (with effect in accordance with Sch. 24 para. 23 of the amending Act) by Finance Act 2008 (c. 9), Sch. 24 para. 10(2)
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 19
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 para. 35
Pt. 2 modified (22.7.2008) by Crossrail Act 2008 (c. 18), Sch. 13 paras. 36, 37
Pt. 2 modified (21.7.2009) by Finance Act 2009 (c. 10), s. 24
Pt. 2 modified (17.7.2013) by Finance Act 2013 (c. 29), s. 73(7)-(11) (with s. 73(6))
Pt. 2 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 9(1)(a)