MGF (Trench Construction Systems) Ltd v HMRC

In MGF (Trench Construction Systems) Ltd v HMRC (TC02399 – 12 December) a company (M) claimed first-year allowances on excavation support equipment which it hired out. HMRC rejected the claim on the basis that the expenditure was ‘on the provision of plant or machinery for leasing’ so that the effect of CAA 2001 s 46(2) (general exclusion 6) was that first-year allowances were not due. M appealed contending that the equipment had not been acquired for leasing since it provided design services (through a subcontractor) as well as equipment. The First-tier Tribunal accepted this contention and allowed the appeal. Judge Cannan held that ‘there can be circumstances where plant is supplied without labour but with other services and benefits such that the expenditure on such plant falls outside general exclusion 6’. On the evidence M was ‘providing...