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HMRC have revised their capital taxes view of polytunnels, the plastic-covered greenhouses often used in commercial agriculture.
Most were previously considered by the department to be fixed structures or, in some cases, as premises rather than as plant or machinery. The opinion was not shared by businesses, tax practitioners or representative organisations including the National Farmers Union (NFU).
Following discussions with the NFU and the British Summer Fruits body, the taxman has accepted that not all polytunnels can be classified as fixed structures or be regarded as providing the premises for growing fruit.
Polytunnels should qualify for plant and machinery capital allowances under part 2 of CAA 2001 if they are neither fixed structures nor premises, the Revenue has conceded.
But the department did not agree with the representative bodies’ proposal that all polytunnels should be regarded as plant, because the uses to which they may be put by businesses are varied and farming techniques will evolve.
Whether or not a structure will qualify for plant and machinery allowances will depend on the facts of each case, including exact use.
HMRC have published relevant guidance in the Capital Allowances Manual at paragraph 22090 – and the department will consider claims in line with the revision.
A business that has had a claim refused based on the taxman’s previous view should contact the office that dealt with the matter, to ask for a reconsideration in light of the information contained in Revenue and Customs Brief 32/12.
