HMRC internal manual

Capital Allowances Manual

Plant and Machinery Allowances (PMA): buildings and structures: shelters, huts and so on

Advertisers sometimes lease shelters which they have erected and which they use to display advertisements to bus companies or local authorities. If they do that you should accept that the shelters are plant or machinery but note that where the assets are fixtures the claimant must have an interest in the relevant land CA26100 (‘Advertising hoardings; signs, displays and similar assets’ are among the assets that are not affected by the exclusions for buildings and structures. CA22030).

Prefabricated buildings are not plant even if they can be taken down and re-erected somewhere else. In St. John’s (Mountford and another) v Ward 49TC524 the school claimed PMAs on a prefabricated gymnasium and laboratory. The capital allowance claim was rejected. All that the gymnasium and laboratory did was provide housing in which the school’s activities could be carried on. They were not apparatus with which the school’s activities were carried on. The buildings contained plant but that was not enough to make the buildings themselves plant.

Most poultry houses / chicken shacks are buildings or structures and so are excluded from PMAs CA22010. They are not plant even if they are used in intensive poultry production and contain automated systems for ventilation, heating, food and water.

There was an Irish case, O’Srianian v Lakeview (1984, 3ITR219), in which the Irish Courts held that the Irish tax commissioners had not erred in law when deciding that a deep-pit poultry house was a single-entity of common law plant. However, decisions in the Irish Courts are not binding in the UK, and it is perhaps unlikely that the UK Courts would agree. Gibson L.J in the Court of Appeal in the later case of Attwood v Anduff car wash 69TC575, commented on the decision in O’Srianian v Lakeview , saying ‘For my part, I have considerable doubt whether the premises test was properly satisfied in that case’. In any case, the matter of whether a poultry house is plant in common law is immaterial in the UK given that buildings are excluded from PMAs. CA22010

Similarly, the fixed chicken cages inside a poultry house should not be accepted as plant.

Refuse a claim for PMAs on a chicken shack / poultry house unless it is moveable and intended to be moved in the course of the trade. Mobility alone is not enough.

Treat temporary huts which are moved from one site to another and used by builders and contractors to provide canteen and toilet facilities or as storage sheds as site plant. They will then qualify for plant or machinery allowances.

Do not give plant or machinery allowances on shop fronts. They are not plant or machinery.

Treat showcases associated with a shop front that are distinct from the structure as fixtures and fittings CA21200.