Not just leasing

The taxpayer company provided temporary works excavation support equipment to the construction industry. It claimed first-year allowances at 40% on business equipment.

The issue was whether the expenditure was in respect of plant and machinery for leasing. HMRC argued this was the case and that the taxpayer was not eligible for the 40% allowances. It qualified instead for writing-down allowances at 25%.

The company argued it offered a package consisting of more than just the leasing of equipment: it provided a design service that was integral to a contract.

As well as taking into account the type of equipment to be used the business also examined the excavation method and process of installation. Designs were specific to each project and a highly technical process.

The First-tier Tribunal decided the taxpayer supplied a design service in addition to the equipment and that both aspects were covered by the charge.

When...