TLDR:
– The First-tier Tribunal (FTT) in the UK recently ruled on the availability of capital allowances for “camping pods.”
– The FTT had to determine whether the pods constituted fixed structures or moveable buildings intended to be moved.
– The Basic Pods were found not to be fixed structures, and the Teacher Pods were found to meet the definition of moveable buildings.
– HMRC conceded that plant and machinery allowances should be available for the Basic Pods, and the FTT determined that the Teacher Pods were moveable but lacked sufficient evidence of intention to move.
The First-tier Tribunal in the UK has made a ruling regarding the availability of capital allowances for “camping pods.” The taxpayer in question had installed two types of pods at two sites in the Brecon Beacons: Basic Pods and Teacher Pods. The Basic Pods provided basic sleeping facilities and were held in place by their own weight, while the Teacher Pods included additional facilities and comfort and required plumbing.
The FTT had to determine whether the pods constituted fixed structures or moveable buildings intended to be moved. All the pods were found to be structures, but the Basic Pods were not considered fixed structures, as they were simply held in place by their own weight. On the other hand, the Teacher Pods were found to be fixed structures due to the plumbing required.
For capital allowances purposes, the term “building” takes its ordinary meaning. The FTT determined that the Basic Pods lacked sufficient substance to be considered buildings, while the Teacher Pods, offering additional facilities and comfort, did meet the definition. HMRC conceded that the pods would be plant at common law, therefore plant and machinery allowances should be available for the Basic Pods.
In regards to the Teacher Pods, the FTT considered three tests: whether the building is moveable, whether it is intended to be moved at the time of making the capital allowances claim, and whether the movement is in the course of the qualifying activity. The FTT concluded that the Teacher Pods were moveable but lacked sufficient evidence of intention to move, despite the existence of formal plans and a quote obtained in 2019 to move the pods.
The ruling has implications not only for camping pods but also for moveable partitions. While it has been common practice for capital allowances specialists to ask clients whether partitions are intended to be moved, the FTT’s rationale suggests that a simple affirmative response may not be enough to substantiate a claim. Further evidence may be required.
