Case Law Flashcards
(15 cards)
Yarmouth v France
Plant
Accepted as the definition of plant.
Employer’s Liability Act 1880.
Cart horse treated as apparatus used to carry on a business.
There must be a degree of permanence and to carry out the trade.
“Goods and chattels, fixed or movable”
Atherton v British Insulated & Helsby Cables Ltd
Capital Expenditure
The asset must have an enduring benefit to the trade
Law Shipping v IRC
Capital
The ship was purchased in a dilapidated state and could not be used until repaired.
The price of the ship reflected the dilapidated state and therefore the expenditure was deemed to be capital.
Odeon Cinemas v Jones
Revenue
Cinemas were purchased in a dilapidated state during and after World War II.
Despite the state of repair, the cinemas continued to be used, and repairs were made over a number of years to follow, the repairs were deemed to be revenue expenses.
Wimpy v Warland
Plant - Ambience
‘Wimpy’ and ‘Pizzaland’ refurbishments
Claimed items used to attract customers and provide a relevant atmosphere as plant
special lighting, carpets, signage, built-in storage units, decorative wall panels, mirrors, food and drink dispensers, wiring, cold water tanks etc.
Set out the Premises Test
JD Wetherspoon v HMRC
Plant
Revenue failed to agree over 120 items.
When determining the matter, the judges assessed 3 key issues:
1. Whether the assets were plant or machinery
2. Whether certain building alterations were incidental to the installation of plant or machinery.
3. To what extent ‘indirect expenditure’ could be claimed on contractors preliminaries, professional fees and builder’s direct costs.
Wall panels were deemed not to be plant as they were “An unexceptional component which would not be an unusual feature of premises of this type”.
Splash backs, WC cubicles, Foul water drainage, strengthened floors were all claimed.
Hinton v Madden & Ireland Ltd
Capital Expenditure
Knives and lasts used by a shoemaker that had a average life of 3 years were held to be plant.
The durability of the assets were deemed to be capital in nature.
An expected life of more than 2 years is likely to be plant.
Benson v The Yard Arm Club Ltd
Plant
The restaurant was a ship floating on the Thames.
The taxpayer had initially claimed the ship as plant.
It was deemed not to be plant as it did not form the function of plant just due to its different setting.
Jarrold v John Good & Sons Ltd
Movable Partitions - Plant
Shipping Agents designed their offices to have movable partitions so they could change the size of departments depending on the level of trade.
This was deemed to be plant.
Leeds Permanent Building Society v Proctor
Plant
Leeds Building Society installed windows variously designed screens.
To make the premises look more like a retail premises and provide a security function.
The screens were deemed to be plant as they were relevant to carrying out the relevant trade.
IRC v Barclay Curle & Co Ltd
Dry Docks
A shipbuilder built a new dry dock, incurring expenditure on excavation, valves and pumps etc.
All of the works were deemed to be plant as the shipbuilder could not carry out their trade without it.
SSE Generation v HMRC
Glencoe Hydro Electric Station - Plant
A long-standing dispute that ended up in the Supreme Court and was settled in 2023.
The dispute was over the constructed items for collection and transmission of water through the hydro electric power station: were the items a ‘tunnel’ or ‘aqueduct’ under S.22 List B?
Deemed not to be a ‘tunnel’ or ‘aqueduct’ and therefore plant.
Gunfleet Sands Ltd & Urenco UK Ltd v HMRC
Windfarms - Plant
Recent Court of Appeal - Preconstruction costs of design related expenditure, environmental and geotechnical surveys can qualify on the provision of plant and machinery
First Tier Tribunal had previously allowed some, but Upper Tribunal had then disagreed
The plant or machinery must then be acquired or constructed
The FTT did agree that each windfarm was a single item of plant.
Acorn Venture Ltd v HMRC
Camping Pods - Plant / Not Plant
26 pre constructed camping pods.
20 basic pods that did not have any incoming water services (i.e. WC facilities) were deemed to be plant as they were movable and did not provide living facilities.
The 6 Teacher Pods had WC facilities and small kitchens that gave them a greater degree of permanence (not plant)
Ben- Odeco Ltd v Powlson (Inspector of Taxes)
Oil Drilling Rig - Definition of ‘Provision’
The costs for acquiring the oil rig qualified as plant
The issue was that they had capitalised interest on borrowings used to finance the acquisition and had claimed that
It was deemed that the costs of borrowing money for the acquisition of plant did not itself qualify as plant or machinery.
