Scintilla of time

The taxpayer was a self-employed air conditioning engineer with an accounting year-end of 31 March. He incorporated from 1 April 2009 on the advice of his accountant and began trading as CC Ltd. He claimed annual investment allowance in respect of a new van bought in July 2008.

HMRC refused the claim saying that relief was not due because it related to the taxpayer’s trade of installing air conditioning which ceased on 31 March 2009.

The department referred to CAA 2001 s 38B which excludes the expenditure when it “is incurred in the chargeable period in which the qualifying activity is discontinued”.

The taxpayer appealed arguing he did the same job before and after he incorporated. The trade had not been discontinued.

The First-tier Tribunal said the taxpayer’s business after he incorporated was “undoubtedly very different to [sic] his trade and activity up to that...