Is it a building or structure or plant & machinery?

Despite HMRC having a policy of resisting claims for buildings or structure in May v HMRC it was shown a grain silo functioned as plant and was able to qualify as such, despite being a building or structure.

Using this case we were able to work with a client to ensure an:

Entire facility qualifies as plant – £1,500,000

The ‘facility’ was used for drying and conditioning grain after harvesting, and for storing it until it was sold. It was agreed by the parties that the silo was a building or structure, and that it was therefore caught by s 21 unless it was rescued by s 23.

Section 21 states that ‘expenditure on the provision of plant or machinery does not include expenditure on the provision of a building’.
Section 22 provides a broadly similar restriction for most structures. Both restrictive sections are, however, ‘subject to section 23’.
Section 23 introduces various categories of ‘expenditure unaffected by sections 21 and 22’, the most important one in this case being
item 28 at List C, which removes the restrictions for ‘silos provided for temporary storage’.

Counsel for the taxpayer argued that ‘there is a strong presumption that if an item falls within a description in List C it will be “plant” for purposes of the CAA’. As List C was drawn up on the basis of earlier case law decisions there is every chance that an item in List C will qualify as plant on case law principles, unless there are exceptional circumstances.

The Tribunal found that the facility was not only used, but also built and designed, to dry the grain and then to keep it dry, so it had more to do than merely to store the grain. As such, it was performing a plant-like role and was allowed in full.