No process

The taxpayer companies which were part of Next plc undertook warehousing and distribution of goods to stores and online shopping customers.

They claimed industrial buildings allowances under CAA 2001 s 274(1) in respect of the construction of two warehouses.

HMRC refused the claim. The taxpayers appealed saying the buildings – as well as being places of storage – were used to subject the goods to a process to make them more marketable.

The First-tier Tribunal noted items were brought into the buildings as part of a bulk load. They were unloaded checked labelled and stored until being dispatched but no physical changes took place.

The tribunal decided that the actions did not constitute a process for the purpose of the Act.

With regard to storage the legislation refers to storage of goods “on their arrival in the UK”. In this instance...