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is it a building or plant and machinery?

A farmer has bought a "pod" which goes inside a barn - is this a building for capital allowances

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The pod consists of a food processing area and refridgiration area, its only about 10 foot by 10 foot and is used for the preperation of ducks for the table.  Would this be classed as plant and machinery (AIA) or as a building?  It cost £10k.  Thank you for any advice

 

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By zebaa
13th Jan 2022 16:40

Will it be moved in the normal course of business ?

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By sarahtaylor2018
13th Jan 2022 16:49

no it wont be moved

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By The Dullard
13th Jan 2022 16:56

It's Benson's Yard Arm.

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Replying to The Dullard:
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By Tax Dragon
13th Jan 2022 17:26

It is?

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Replying to Tax Dragon:
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By The Dullard
13th Jan 2022 17:34

Yes. It was a restaurant on a boat. Restaurant's have kitchens where they prepare food, using food preparation equipment, not the boat.

This is a pod, where they prepare food, using food preparation equipment, not the pod.

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Replying to The Dullard:
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By Tax Dragon
13th Jan 2022 17:49

So what does the pod do? If it doesn't do anything, how can it qualify for CAs?

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By The Dullard
13th Jan 2022 19:43

`That was the conclusion in Benson's yard Arm as well. It was the setting in which the trade was carried on and not the apparatus with which the trade was carried on.

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By Tax Dragon
13th Jan 2022 17:06

Do the ducks get dried whilst being preperated for the table?

I have it in mind that the provision of dry ducks is specifically P&M.

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Replying to Tax Dragon:
By ireallyshouldknowthisbut
13th Jan 2022 17:12

Tax Dragon wrote:

Do the ducks get dried whilst being preperated for the table?

I have it in mind that the provision of dry ducks is specifically P&M.

heh, I do love the random clutter in tax people's minds. A lifetime of learning enough to know it matters if the ducks are dry or not. Of course the next question is "how dry is dry?"

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Replying to ireallyshouldknowthisbut:
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By Tax Dragon
13th Jan 2022 17:22

I'm still hung up on the first word... "provision"... shouldn't it be "provisioning"?... so I haven't made it to word three of the clause yet.

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By The Dullard
13th Jan 2022 17:22

Tax Dragon wrote:

Do the ducks get dried whilst being preperated for the table?

I have it in mind that the provision of dry ducks is specifically P&M.

Barclay Curle

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Replying to The Dullard:
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By Tax Dragon
13th Jan 2022 17:52

The Dullard wrote:

Barclay Curle

Very good knowledge. (There was me thinking it was just an item on a list... so I guess it's another instance of statute including a rule thanks to, presumably, an accountant or tax advisor?)

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By fawltybasil2575
13th Jan 2022 18:44

@ sarahtaylor2018 (OP).

For useful commentary, see here (I have no connection with the author):-

https://www.icaew.com/technical/tax/tax-faculty/taxline/taxline-2019/mar...

For more specific guidance, possibly see here:-

https://www.legislation.gov.uk/ukpga/2001/2/section/23

Frankly, I feel that one may be best placed to determine the probable correct treatment if one asks the important question:-

“Why did the client spend £10K on a Pod, to place inside a building (the barn) instead of either (i) just carrying out the required process in a part of the building or (ii) carrying out the process by means of purchasing item(s) other than the Pod ?”.

Then consider whether there is any mileage in the supportive argument that the £10K expenditure on the Pod is “incidental” to the purchase of the "processing"/refrigeration"/"preparation" equipment.

In practical terms Capital Allowances on the cost of the Pod, being relatively small, are unlikely to be challenged by HMRC. You may perhaps ultimately form the conclusion that the matter is not free from doubt (if such be the case, a brief “white space” note on the Tax Return, explaining your rationale for the Capital Allowances claim, would normally be the recommended approach).

Basil.

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Replying to fawltybasil2575:
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By Tax Dragon
13th Jan 2022 23:13

Your logic confuses me Basil. If you are citing the list in s23 and the silo case, presumably that's because you think the list in s23 and the silo case are relevant. If they're relevant, it can only be because the pod would otherwise fall foul of either s21 or s22; s23, as you of course know very well, provides a list of specific items that are 'protected' from the previous two sections. A list of items that may therefore qualify for CAs.

Structures (and buildings) not on the list don't qualify.

As you had laid out that background, I was expecting your next statement to be to identify which item on the list described the farmer's pod. Instead you've switched to an entirely unrelated argument. But that won't do, will it? If you are saying s23 may be relevant, if you are saying that, without s23, s21 or s22 block any CAs, then you need to identify which item on the list might apply. [Just as I did; though now I look harder at item 23 (and read past the first word) I see I wasn't quite right.] (Edit: the silo case succeeded because silos are on the list.)

If your alternate, non-s23-related argument has any merit, then it wasn't half confusing to introduce it the way you did, laying out a context of s23.

Or have I as usual missed your point?

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By vinylnobbynobbs
14th Jan 2022 13:38

Pods - Always reminds me of Invasion of the Body Snatchers.

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Replying to vinylnobbynobbs:
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By Tax Dragon
15th Jan 2022 01:19

Had to look that up. "An alien species of human duplicates, grown from plant-like pods..."

Plant-like? Is that, like, plant?

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Replying to Tax Dragon:
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By The Dullard
15th Jan 2022 11:22

It's a tofu substitute.

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Replying to Tax Dragon:
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By vinylnobbynobbs
17th Jan 2022 08:10

Tax Dragon wrote:

Had to look that up. "An alien species of human duplicates, grown from plant-like pods..."

Plant-like? Is that, like, plant?


Well it is not machinery
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paddle steamer
By DJKL
17th Jan 2022 10:32

What does the pod do, if anything, beyond being where equipment is placed?

e.g are there say extraction systems re safety/staff welfare inherent within its design, is there any functionality of the actual pod beyond setting?

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By chronus
17th Jan 2022 12:04

"The pod consists of a food processing area and refridgiration area, its only about 10 foot by 10 foot and is used for the preperation of ducks for the table."

The above convey the following understanding.
Provision of refrigerated housing. Preparation of ducks for the table is not sufficient to detail and conclude on processing.
Given that this would be such a process where strict regulatory compliance and monitoring is required, is this housing purpose built. If so how has it been constructed and equipped to comply with relevant regulations. Furthermore is it permanently fixed in the building where it is housed.
How adequate air supply and circulation and temperature control has been provided.
A good example to consider as a comparator, is a chiller in an abattoir. These are housed within the building, they are large units. They are very much part of the whole process and certainly are plant for the purposes of Capital Allowances.
I would suggest you need rather more information and detail from the client.

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