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Capital Allowance: Whether expenditure on constructing a Car Valeting Bay is Plant

It was held by the First-Tier Tax Tribunal that the valeting bay was not plant. The building does not perform a function, it was a place of work which does not amount to plant.

Rogate Services Limited v HMRC

  • Sitting in public at Southampton Appeals Service, 83-85 London Road, Southampton, S015 2SH on 11 September 2013

  • Geoffrey Hicks, Accountant, of Wood, Hicks & Co for the Appellant Paul Shea of HM Revenue and Customs, for the Respondents CROWN COPYRIGHT 2014


1. This is an appeal by Rogate Services Limited ("the Taxpayer") against the disallowance of plant or machinery allowances in respect of what the Taxpayer described as a valeting bay ("the Building").

2. The disallowance was notified by letter dated 29 June 2012.A Closure Notice was issued on 5 July 2012 and reissued on 20 July 2012.

This was confirmed to the Taxpayer by letter dated 22 August 2012.

The Issue

3. In essence, the issue in this case was whether or not the cost of construction of the Building qualified for plant or machinery allowances as plant.

4. It was accepted that there is a qualifying activity here.

5. Only a small amount of expenditure in connection with the Building relating to the accounting period ending 31 October 2008 and some for 2010 was before us.

We only have jurisdiction to deal with the matters under appeal and so confine ourselves to them.

This decision only relates to the expenditure disallowed. As a matter of law it does not decide any other matters.

The Law


6. The statute law is found in the Capital Allowances Act 2001 ( CAA) and in particular sections 21-23.

Section 28 makes special provision for the cost of Thermal Insulation of Buildings.

References to sections in this decision are to sections of the CAA unless the context otherwise requires.

7. Section 21 is headed Buildings and provides:

(1) For the purposes of this Act, expenditure on the provision of plant or machinery does not include expenditure on the provision of a building.

(2) The provision of a building includes its construction or acquisition.

(3) In this section, building includes an asset which

(a) is incorporated in the building,

(b) although not incorporated in the building (whether because the asset is moveable or for any other reason), is in the building and is of a kind normally incorporated in a building, or

(c) is in, or connected with, the building and is in list A.


Assets treated as buildings

  1. Walls, floors, ceilings, doors, gates, shutters, windows and stairs.

  2. Mains services, and systems, for water, electricity and gas.

  3. Waste disposal systems.

  4. Sewerage and drainage systems.

  5. Shafts or other structures in which lifts, hoists, escalators and moving walkways are installed.

  6. Fire safety systems.

(4) This section is subject to section 23 .

(1) For the purposes of this Act, expenditure on the provision of plant or machinery does not include expenditure on

(a) the provision of a structure or other asset in list B, or

(b) any works involving the alteration of land.


Excluded structures and other assets

  1. A tunnel, bridge, viaduct, aqueduct, embankment or cutting.

  2. A way, hard standing (such as a pavement), road, railway, tramway, a park for vehicles or containers, or an airstrip or runway.

  3. An inland navigation, including a canal or basin or a navigable river.

  4. A dam, reservoir or barrage, including any sluices, gates, generators and other equipment associated with the dam, reservoir or barrage.

  5. A dock, harbour, wharf, pier, marina or jetty or any other structure in or at which vessels may be kept, or merchandise or passengers may be shipped or unshipped.

  6. A dike, sea wall, weir or drainage ditch.

  7. Any structure not within items 1 to 6 other than

  8. a structure (but not a building) within Chapter 2 of Part 3 (meaning of industrial building ),

  9. a structure in use for the purposes of an undertaking for the extraction, production, processing or distribution of gas, and

  10. a structure in use for the purposes of a trade which consists in the provision of telecommunication, television or radio services.

(2) The provision of a structure or other asset includes its construction or acquisition.

(3) In this section

  1. Structure means a fixed structure of any kind, other than a building (as defined by section 21(3)), and

  2. and does not include buildings or other structures, but otherwise has the meaning given in Schedule 1 to the Interpretation Act 1978.

(4) This section is subject to section 23.

  1. Sections 21 and 22 do not apply to any expenditure to which any of the provisions listed in subsection (2) applies.

  2. The provisions are

  • section 28 (thermal insulation of industrial buildings);

  • section 29 (fire safety); section

  • 30 (safety at designated sports grounds); section 31 (safety at regulated stands at sports grounds); section

  • 31 (safety at regulated stands at sports grounds); section

  • 32 (safety at other sports grounds); section

  • 33 (personal security);

  • section 71 (software and rights to software);

  • section 40D of F (No.2) A 1992 (election relating to tax treatment of films expenditure).

3. Sections 21 and 22 also do not affect the question whether expenditure on any item described in list C is, for the purposes of this Act, expenditure on the provision of plant or machinery.

4. But items 1 to 16 of list C do not include any asset whose principal purpose is to insulate or enclose the interior of a building or to provide an interior wall, floor or ceiling which (in each case) is intended to remain permanently in place.

Expenditure unaffected by sections 21 and 22

1. Machinery (including devices for providing motive power) not within any other item in this list.