Basic camping pods qualified for relief

The taxpayer was a tour operator providing residential adventure holidays for school children in various centres. It bought 26 pre-constructed camping pods for a site in south Wales as accommodation for students and teachers to replace the existing portakabins. The pods were erected on a hard standing area and were supported by breeze blocks and a wooden base frame. Each pod was anchored to the ground. They were the same externally but the six teachers’ pods were equipped with flushing toilets washing facilities and a small kitchen area.

The taxpayer claimed annual investment allowance (AIA) for the cost of the pods including legal fees incurred because the centre was in a national park.

After an enquiry HMRC issued a closure notice disallowing the claim. It accepted that the expenditure was capital and that the pods were not the setting or premises from which the company’s business operated ...