Urenco Chemplants Ltd & Anor v Commissioners for His Majesty's Revenue And Customs [2022] EWCA Civ 1587 (01 December 2022)

Urenco Chemplants Ltd & Anor v Commissioners for His Majesty's Revenue And Customs [2022] EWCA Civ 1587 (01 December 2022)

The Court of Appeal held that the question of whether the disputed structures at the TMF are plant or premises is a question of fact and degree, requiring an evaluative judgment by the fact-finding tribunal. The FTT erred in law by failing to assess the functionality of the assets in the context of the business as actually carried on, including regulatory requirements. The UT was correct to set aside the FTT's decision on this basis and to remit the matter for reconsideration. The Court clarified that safety and regulatory functions may be relevant to the plant/premises distinction, but do not automatically convert premises into plant. The applicability of List C carve-outs must be...

Citation
[2022] EWCA Civ 1587
Parties
Appellant/respondent: Urenco Chemplants Limited; Appellant/respondent: Urenco UK Limited; Respondent/appellant: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
01 December 2022
Procedural Posture
Appeal (tax) / Court of Appeal Judgment on Cross Appeals From Upper Tribunal (tax and Chancery Chamber)
Outcome
Appeal and cross-appeal allowed in part; case remitted to the First-tier Tribunal for reconsideration in accordance with the Court of Appeal's guidance.
Legal Topics
Capital Allowances, Plant and Machinery, Statutory Interpretation, Industrial Buildings, Premises Vs Plant Distinction
Tax Law Administrative Law Capital Allowances Plant and Machinery Statutory Interpretation Industrial Buildings Premises Vs Plant Distinction

Case Brief

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Parties

Urenco Chemplants Limited

Appellant/respondent

Urenco UK Limited

Appellant/respondent

The Commissioners for His Majesty's Revenue and Customs

Respondent/appellant

Procedural Posture

Appeal (tax) / Court of Appeal Judgment on Cross Appeals From Upper Tribunal (tax and Chancery Chamber)

Legal Issues

  1. 1 Whether disputed expenditure on structures at the Tails Management Facility (TMF) qualifies for capital allowances as 'plant or machinery' under section 11 Capital Allowances Act 2001 (CAA 2001)
  2. 2 Whether such expenditure is excluded as being 'on the provision of a building' under section 21 CAA 2001
  3. 3 Whether exceptions or 'carve-outs' in List C (section 23 CAA 2001) apply to save the expenditure from exclusion

Ratio Decidendi

The Court of Appeal held that the question of whether the disputed structures at the TMF are plant or premises is a question of fact and degree, requiring an evaluative judgment by the fact-finding tribunal. The FTT erred in law by failing to assess the functionality of the assets in the context of the business as actually carried on, including regulatory requirements. The UT was correct to set aside the FTT's decision on this basis and to remit the matter for reconsideration. The Court clarified that safety and regulatory functions may be relevant to the plant/premises distinction, but do not automatically convert premises into plant. The applicability of List C carve-outs must be...

Court Disposition

Appeal and cross-appeal allowed in part; case remitted to the First-tier Tribunal for reconsideration in accordance with the Court of Appeal's guidance.

Orders

  • The FTT's decision is set aside to the extent identified by the Court of Appeal.
  • The case is remitted to the FTT to remake the relevant decisions on the plant/premises and building exclusion issues, applying the correct legal principles.