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HMRC have clarified their views relating to changes to capital allowances arising from Finance Act 2008.
Revenue & Customs Brief 66/08 seeks comments (no later than 10 February) on draft guidance on the changes to capital allowances. For example, the new annual investment allowance, rate changes, small pools allowance, made by FA ‘08.
New guidance on these matters will be incorporated into the taxman's Capital Allowances Manual.
The brief also clarifies HMRC’s approach to capital allowances claims on slurry storage facilities.
The department’s view is that systems used for the temporary storage of slurry anywhere in the UK qualify as plant or machinery for the purposes of the capital allowances legislation.
Any building or structure that is part of a slurry storage facility does not, qualify, however, because it is specifically excluded by CAA 2001, s 21 and does not constitute plant or machinery.
The brief notes that the taxman should, in general, accept claims for plant and machinery allowances in respect of slurry storage systems.
Enquiries should be limited to significant claims for systems that appear to differ from the components described above, or facilities that include buildings or structures.
Slurry storage systems may generally be accepted as plant and machinery, so business expenditure on them will qualify for plant and machinery capital allowances, including the new annual investment allowance.
Finally, the Revenue brief describes the department’s view on the application of CAA 2001, s 35 (no capital allowances for plant and machinery used in a dwelling house) to university halls of residence and similar facilities.
The taxman considers communal areas not to be dwelling houses. Areas to which tenants do not have access are also not dwelling houses. All other areas are dwelling houses, however.
This view extends to other types of multiple occupancy accommodation, such as those provided to key workers.
