Capital Allowances

Lord Cameron in the House of Lords judgment in the case CIR v Scottish and Newcastle Breweries Ltd. (55 TC 252) said: "the question of what is properly to be regarded as plant can only be answered in the context of the particular industry concerned and possibly in the light also of the particular circumstances of the individual taxpayer's own trade".

A recent case involving the pub chain Wetherspoon has helped clarify the position. It has come to mean that plant is any asset that plays a functional role in a business that is not machinery or part of the building. So that could be a sink or a hand rail to help people with impaired mobility. At last identification of plant is easier but relief is also given for the cost of altering a building to enable plant to be installed.

As the cost of such works is added to the cost of the asset and with capital allowances being claimed on the total cost there have been disputes with HMRC culminating in the Wetherspoon case which recently ended after five years.

https://www.capitalallowances.com/tax/annual-investment-allowance-explained/