You may have a case where a person receives an additional VAT
rebate in respect of qualifying expenditure.
If the VAT rebate is less than the residue of qualifying
expenditure immediately before the rebate deduct the rebate from
the residue of qualifying expenditure and recalculate the WDA in
the same way as you recalculate it when someone buys a used
industrial building
CA31200. The WDA will be lower than
before.
Example If in the example in
CA39200 Terry does not pay additional VAT
after 5 years when the residue of qualifying expenditure is
£200,000 but receives an additional VAT rebate of £4,000;
his annual WDA goes down from £10,000 to £9,800 (=
[£200,000 - £4,000] / 20).
If the VAT rebate is more than the residue of qualifying
expenditure immediately before the rebate the difference is a
balancing charge. The residue of qualifying expenditure becomes nil
and no more WDA is made.
