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HMRC internal manual

Capital Allowances Manual

Plant and Machinery Allowances (PMA): meaning of plant and machinery: when setting is plant

Generally an asset that is part of the setting is not plant. However there have been a few cases where items which are part of the setting, but not part of the business premises, were held to be plant as they were also part of the of the apparatus with which the trade was carried on.

In the case of Jarrold v John Good & Sons Ltd. 40TC681, moveable partitions were held to be plant. The partitions were part of the setting but were not part of the premises in which the trade was carried on. The Commissioners found as a fact that as a matter of commercial necessity the partitions had to possess mobility and flexibility for the day to day running of the business. They were apparatus with which the company carried on its business.

The *John Good *case does not mean that all moveable partitions are plant. It you get a claim that moveable partitions are plant you should check to see if they need to possess mobility as a matter of commercial necessity before you accept the claim. It is also worth checking whether they have in fact ever been moved.

Another case where items which were part of the setting in which the trade was carried on were held to be plant is the case of Leeds Permanent Building Society v Proctor 56TC293. In that case, the society claimed that decorative screens used for window displays were plant. The capital allowance claim was refused and the society appealed. The Inspector won at the Commissioners and so the society appealed to the High Court, where it won.

The Commissioners found that the purpose of the screens was to attract the attention of passers by and so bring business to the society. The High Court held that the window screens were part of the shop furniture with which the trade of the society was carried on in the branch office concerned. The screens were not capable of use without considerable modification for any business but that of the *Leeds Permanent Building Society *and indeed some were of such a character that they were really only of use in the particular branch. They were removed by the society when it left a branch office and were designed specifically for the society’s business.