Business tax: Capital allowances
In B & E Security Systems Ltd v HMRC (TC00452 – 6 May) a company carried on a business of installing maintaining and monitoring intruder alarm systems. It constructed a control room to house security equipment. In its returns it treated this expenditure as being on plant and machinery and as qualifying for capital allowances. HMRC issued amendments to disallow the allowances claimed and the company appealed. The First-Tier Tribunal allowed the appeal holding on the evidence that 'the sums incurred on the construction of the control room' were 'incidental to the sums incurred on the acquisition of plant and machinery in the form of security equipment'.
Why it matters: The Tribunal held that HMRC was adopting an unduly restrictive interpretation of 'plant and machinery' and held that the expenditure was 'incidental' to the acquisition of plant and qualified...
