“Planteria” — Structure with suitable conditions for displaying plants in garden centre — Whether planteria was “plant” for purposes of claiming first-year allowances — High Court holding that planteria was premises where trade carried on and did not attract capital allowances — First-year allowances being withdrawn progressively from 1984 until 1987 — Revenue’s appeal allowed
The taxpayers carried on business in partnership as a garden centre. In 1983 they constructed a “planteria”, ie a glass house which protected growing plants from the weather and created an environment, not achievable in any other structure, in which the plants could grow and maintain the quality of growth. The roof of the planteria was glazed with special glass which allowed maximum light penetration and heat retention; and was constructed so as to allow panes to open and shut to control ventilation, which was further controlled by taking away side netting. The planteria was not heated, although it was possible to provide heating with paraffin heaters which were separate from the structure. The floor consisted of paving slabs with shingle scattered below each bench to allow drainage. Customers could move between the benches with trolleys. Writing-down allowances are available for capital expenditure incurred on plant and machinery, although first-year allowances have been gradually withdrawn by 1987. Plant has been described as including all goods and chattels, fixed or moveable, live or dead, which a businessman keeps for permanent employment in his business: see Yarmouth v France (1887) 19 QBD 647, at p 658. This should be contrasted with the place in which the business is carried on. The taxpayers claimed capital allowances in respect of expenditure incurred in the construction of the planteria on the basis that it was plant for the purposes of sections 41 and 42 of the Finance Act 1971. The Inland Revenue refused the claim, but the General Commissioners allowed the taxpayers’ appeal. The Revenue appealed.
Held The appeal was allowed.
1. On the evidence it was impossible to say that the planteria was “plant”. It was simply a structure in which the taxpayers carried on their trade by displaying and selling plants. A planteria was a fixed structure designed to maintain many different kinds of plants in an environment which would keep them in good condition until sale. It was designed to provide a mini climate in different parts of the planteria suitable for different varieties of plants. It was open to the public, who could walk around it and choose from the plants on offer.
2. It might be that a specialised glass house with integral automatic ventilation, shade screens and other equipment could be considered plant and not the premises in which the trade was carried on. However in this case the planteria fell on the side of premises wherever the line was drawn.
Timothy Brennan (instructed by the solicitor of Inland Revenue) appeared for Ms Gray (HMIT); Robin Mathew (instructed by Badhams) appeared for the taxpayers.