J D Wetherspoon plc v Revenue & Customs [2009] UKFTT 374 (TC) (18 December 2009)

J D Wetherspoon plc v Revenue & Customs [2009] UKFTT 374 (TC) (18 December 2009)

Expenditure is eligible for capital allowances under section 66 CAA 1990 only if it is for alterations to an existing building that are incidental to the installation of machinery or plant, not for general finishes or structural works. Items such as specific splashbacks, lighting providing ambience, partitions incidental to toilets, and reinforced floors for equipment may qualify, but general tiling, flooring, or finishes do not. The eligibility of each item depends on its direct nexus to the installation and function of machinery or plant for the trade.

Citation
[2009] UKFTT 374
Parties
Appellant: J D Wetherspoon plc; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
18 December 2009
Procedural Posture
Corporation Tax Appeal / Decision on Application of Prior Ruling to Sample Expenditure Items
Outcome
Appellant successful in part
Legal Topics
Capital Allowances, Machinery or Plant, Alterations to Buildings, Section 24 CAA 1990, Section 66 CAA 1990
Tax Law Corporate Law Capital Allowances Machinery or Plant Alterations to Buildings Section 24 CAA 1990 Section 66 CAA 1990

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Parties

J D Wetherspoon plc

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Corporation Tax Appeal / Decision on Application of Prior Ruling to Sample Expenditure Items

Legal Issues

  1. 1 Whether specific items of expenditure on conversion, fitting out, and refurbishment of public houses qualify for capital allowances under section 24 or section 66 of the Capital Allowances Act 1990.
  2. 2 What constitutes an alteration to an existing building incidental to the installation of machinery or plant for the purposes of the trade.

Ratio Decidendi

Expenditure is eligible for capital allowances under section 66 CAA 1990 only if it is for alterations to an existing building that are incidental to the installation of machinery or plant, not for general finishes or structural works. Items such as specific splashbacks, lighting providing ambience, partitions incidental to toilets, and reinforced floors for equipment may qualify, but general tiling, flooring, or finishes do not. The eligibility of each item depends on its direct nexus to the installation and function of machinery or plant for the trade.

Court Disposition

Appellant successful in part

Orders

  • Formal decision on the eligibility of 'clear' and 'unclear' items for capital allowances as set out in the judgment.
  • Some items allowed, some disallowed, as detailed in the decision.