The taxpayers were members of the same group and each operated an offshore windfarm for the generation and sale of electricity. They claimed capital allowances for expenditure incurred on technical and engineering studies and project management relating to windfarms.
HMRC refused the claim on the basis the expenditure was ‘too remote from’ and ‘not on the provision of’ the generation assets. It put the taxpayers in the position to incur expenditure on plant but was not actually spent on plant.
The First-tier Tribunal allowed the appeal in part. It rejected HMRC’s case that each wind turbine and each connector cable were separate items of plant instead agreeing with the taxpayers that the plant was made up in respect of each windfarm site of the wind turbines and cabling collectively (the ‘generation assets’). On the environmental and other technical studies the First-tier Tribunal found that some were qualifying...
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