Laundry is commercial

A syndicate funded a project to build a laundry in the Lanarkshire enterprise zone at Wishaw. The facility was to be used by local NHS hospitals.

The taxpayer one of the investors in the syndicate claimed an initial allowance under CAA 2001 s 305 contending that the building was commercial within s 271(1)(b)(iv).

HMRC refused the claim on the grounds that the laundry did not have a commercial use; the organisations using it could not make a profit precluding the facility from qualifying as an industrial building.

The taxpayer appealed saying there was a trading relationship between the NHS trusts using the laundry.

The First-tier Tribunal said one issue was in point: was the laundry building a commercial one in the sense that it was used for a trade? It was: there was no profit motive but the arrangements between the hospitals were...