CA20070 - PMAs: Introduction: Professional fees and preliminaries

Professional fees, such as survey fees, architects' fees, quantity surveyors' fees, structural engineers' fees, service engineers' fees or legal costs, only qualify for PMA as expenditure on the provision of plant or machinery if they relate directly to the acquisition, transport and installation of the plant or machinery.

Where professional fees are paid in connection with a building project that includes the provision of plant or machinery, only the part, if any, which relates to services that can properly be regarded as on the provision of plant or machinery can be qualifying expenditure for PMA. In determining how much of a combined fee relates to such services, the services to which the fee relates will need to be analysed. It is not appropriate simply to apportion the fee by reference to the building costs of the plant and machinery and of other assets as that will commonly overstate the extent to which the services relate to the provision of the plant and machinery.

You should adopt the same approach to preliminaries. These are indirect costs incurred over the duration of a project, which will often include demolition works and site preparation, as well as the construction of a building. Items like site management, insurance, general purpose labour, temporary accommodation and security are preliminaries.