JRO Griffiths Limited v The Commissioners for Her Majesty’s Revenue and Customs  UKFTT 257 (TC) resulted in the taxpayer winning their appeal in whether or not a warehouse used to store potatoes for a crisp manufacturer is plant. The taxpayer won on 2 counts, as a silo and as a cold store.
There are similarities to a previous case, May & Amor v RCC  UKFTT 32 (TC), where the taxpayer won the case for a grain store acting as a silo. This demonstrates that HMRC is prepared to contest a claim for plant for a similar asset. With the introduction of the “super allowance” at 130%, we would expect more taxpayers to consider claiming assets described as buildings and structures to be claimed as plant. Careful consideration of the facts, interpretating case law with fully backup arguments will be necessary with a greater potential for disputes with HMRC. In this case the value in dispute was £319,483, modest when compared to other cases such as SSE Generation v HMRC for £260million.
The case involved the taxpayers specialised activity of growing crisping potatoes, and being able to supply a consistent quality throughout the year. This involves storing the potatoes for long periods of time in a controlled environment, both for temperature and moisture and drying. The design and construction of the store, along with the computerised controls, are very different to a “warehouse”, the floor, walls, plenum plant room, and the size all are key to the function of storing potatoes. The store was 6 times more expensive than a standard building.
The Capital Allowances legislation defines a building and a structure in CAA2001 S21 and S22. However, under CAA2001 s23, “a silo and a cold store” are unaffected by S21 and S22. The case required applying the function, business, and premises tests to determine the outcome based on case law. Further arguments were made by HMRC on the interpretation of “storage”, a “silo” and a “cold Store”, all of which were unsuccessful.