Cobalt Data Centre 2 LLP & Anor v Revenue And Customs [2022] EWCA Civ 1422 (31 October 2022)

Cobalt Data Centre 2 LLP & Anor v Revenue And Customs [2022] EWCA Civ 1422 (31 October 2022)

The expenditure incurred by the LLPs on the construction of DC2 and DC3 was not incurred under the same contract entered into within the statutory ten-year period. The changes made by the Works Orders went beyond the scope of permissible variations under the Golden Contract and amounted to new contracts outside the relevant period, thus disqualifying the expenditure from EZAs.

Citation
[2022] EWCA Civ 1422
Parties
Appellant and Respondent: Cobalt Data Centre 2 LLP; Appellant and Respondent: Cobalt Data Centre 3 LLP; Appellant and Respondent: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
31 October 2022
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed in part; cross-appeal dismissed
Legal Topics
Enterprise Zone Allowances, Capital Allowances, Contract Variation, Industrial Building Allowances
Tax Law Contract Law Enterprise Zone Allowances Capital Allowances Contract Variation Industrial Building Allowances

Case Brief

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Parties

Cobalt Data Centre 2 LLP

Appellant and Respondent

Cobalt Data Centre 3 LLP

Appellant and Respondent

The Commissioners for His Majesty's Revenue and Customs

Appellant and Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether LLPs are entitled to Enterprise Zone Allowances (EZAs) on sums paid under contracts for construction of data centres
  2. 2 Whether expenditure was incurred under a contract entered into within the statutory time limit
  3. 3 Whether contract variations amounted to a new contract outside the relevant period

Ratio Decidendi

The expenditure incurred by the LLPs on the construction of DC2 and DC3 was not incurred under the same contract entered into within the statutory ten-year period. The changes made by the Works Orders went beyond the scope of permissible variations under the Golden Contract and amounted to new contracts outside the relevant period, thus disqualifying the expenditure from EZAs.

Court Disposition

Appeal allowed in part; cross-appeal dismissed

Orders

  • LLPs not entitled to EZAs on the whole of their expenditure
  • Expenditure incurred under new contracts outside statutory period does not qualify for EZAs