“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 — Court of Appeal dismissing taxpayers’ appeal against that decision
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 removing 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 were available for capital expenditure incurred in plant and machinery, although first-year allowances were gradually withdrawn between 1984 and 1987. Plant included all goods and chattels, fixed or movable, live or dead, which a businessman kept for permanent employment in his business: see Yarmouth v France (1887) 19 QBD 647 at p658. That was to be contrasted with the place in which the business was 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 Revenue refused the claim, but the General Commissioners allowed the taxpayer’s appeal against that refusal. The High Court allowed an appeal by the Revenue: see [1993] EGCS 72. The taxpayer appealed.
Held The appeal was dismissed.
1. A large structure used for the purposes of a trade was capable of being called plant: see Inland Revenue v Barclay, Curle & Co Ltd [1969] 1 WLR 675.
2. The question was what did it function as? If it functioned as part of the premises it was not plant. The fact that the building in which a business was carried on was specially built for that business did not make it plant.
3. While a cold frame which provided a similar function to that of the planteria might well have been plant, the same could not be said of the planteria itself. It was a structure to which plants were brought already in a saleable condition, albeit that some of them tended to be in there for quite considerable periods and others required special treatment.
4. Once in there they were available for inspection by customers who could pass freely between the benches and take them in trolleys or baskets to a point of purchase. The fact that the planteria provided the function of nurturing and preserving the plants while they were there could not transform it into something other than part of the premises in which the business was carried on. The highest it could be put was that it functioned as a purpose-built structure.
Robin Mathew QC (instructed by Badhams Thompson) appeared for the taxpayers; Timothy Brennan (instructed by the solicitor to the Inland Revenue) appeared for the Crown.
