Yesterday in a written statement, the Exchequer Secretary to the Treasury announced that HM Revenue & Customs would be conducting a technical reviw of the BPRA Legislation. The review is apparently being undertaken to make its policy purpose even clearer so that the relief will be easier for both claimants and HMRC to operate.

The announcement was made against a background of many recent DOTAS (Disclosure of Tax Avoidance Schemes) disclosures involving BPRAs, which HMRC feels contain some features aimed at exploiting the relief in the way that Parliament had not intended.

As such, the review does not appear to be generally concerned with claims made by trading businesses but more at certain syndicated investment structures where it is felt the claim levels and the timing of the claims are being manipulated in ways which cause concern.

Indeed, HMRC are currently undertaking detailed enquiries into the disclosed schemes and other claims for BPRAs to fully understand particular features and the amounts claimed. These enquiries are at an early stage, but already HMRC feel they contain a varying balance of genuine expenditure on actual regeneration and some features that have elements of artificiality, possibly aimed at ramping-up qualifying expenditure and accelerating tax relief in ways that could be regarded as inappropriate.

Thankfully, the review states that while addressing the risk of exploitive or artificial features, in order to safeguard the policy, protect the Exchequer and secure value for money, the Government’s aim is to preserve the BPRA investment incentive.