Keith Gordon looks at a case where HMRC tried to reinterpret the availability of enterprise zone allowances in relation to buildings constructed under a ‘golden contract’.
The concept of enterprise zones (EZs) was born in the first year or so of Mrs Thatcher’s premiership. The idea was to generate development in deprived areas of the country by designating them as EZs where there would be relaxed planning laws and relief from business rates. There were also tax reliefs to encourage private sector investment. Broadly speaking, investors could claim up to 100% tax relief on the acquisition of new commercial buildings in an EZ, effectively a form of tax deferral as subsequent rental streams would be taxed in the normal way.