Goods not processed

Next Distribution Ltd part of Next Group provided warehousing and distribution services for Next Retail. It claimed industrial building allowances on two warehouses which were built between 1997 and 1999 to store goods.

HMRC refused the claims.

The First-tier Tribunal dismissed the Next companies’ appeal and the case moved to the Upper Tribunal.

The taxpayers said the goods stored in the warehouses were subject to a process and qualified for industrial building allowances under CAA 1990 s 18(1)(e) and (f) (now CAA 2001 s 271 to s 274).

Mr Justice Richards referred to several cases that concerned the subjection of goods to a process. They included Kilmarnock Equitable Co-operative Society v CIR 42 TC 675 Buckingham v Securitas Properties Ltd 53 TC 292 and Girobank plc v Clarke [1998] STC 182.

He concluded that “the unpacking of goods received in large quantities and...