Allowances on conversion

The taxpayer owned and operated public houses and restaurants. It renovated and converted existing buildings which entailed substantial expenditure with the creation of new rooms putting up new walls and strengthening floors.

The company claimed capital allowances on the work some of which were not allowed by HMRC.

The subsequent appeal was heard first in 2007 by the Special Commissioners who dealt with specific items and then in 2009 by the First-tier Tribunal which decided on the remaining ‘substantial body of... “unclear items”’.

Neither party was satisfied with the outcome; the taxpayer appealed and HMRC cross-appealed.

In essence three issues fell to be considered at the High Court:

• the dismissal of the taxpayer’s claims under CAA 1990 s 24;
• the dismissal of some claims under

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