SSE Generation decision on capital allowances

KEY POINTS

• There are still huge areas of potential dispute over what constitutes plant or machinery and the HMRC view cannot always be taken at face value.
• The restrictions of CAA 2001 s 21 and s 22 may be less severe than they seem.
• The interaction of those sections with more than 100 years of case law is complex and still open to different interpretation.
• The distinction between premises within which a trade is conducted and the apparatus with which it is conducted remains valid.

The decision in SSE Generation Ltd (TC6618) on capital allowances is the most important one in recent years. The direct subject matter – a vast hydro-electric scheme – will affect relatively few businesses but...