Expenditure on construction of facility at nuclear site

The taxpayers were part of a corporate group that provided about 30% of the global enriched uranium supply for the civil nuclear industry. It built a tails management facility and claimed capital allowances on the capital expenditure. HMRC ruled that £192m did not qualify.

The First-tier Tribunal found that all the disputed expenditure was excluded by CAA 2001 s 21. Further none was saved by being within list C of s 23.

Urenco appealed to the Upper Tribunal.

The Upper Tribunal said the First-tier Tribunal had erred in law in applying the functionality test when deciding whether items were plant or machinery. Similarly it had erred in law in determining that s 21 applied to prevent all of the disputed items of expenditure being eligible for plant and machinery allowances.

However it had not erred in law on its decision over whether the expenditure was ‘on the provision of’ plant...