Case Law

Question 1

J D Wetherspoons V HMRC

Answer 1

• Refurbished pub and claimed CAs on sanitaryware, drainage, floor strengthening works.

Was denied but appealed

Sec 25 works established for drainage, floor strengthening to kitchen & splashbacks

Question 2

The Yard Arm Ltd v Benson

Answer 2

FUNCTIONAL TEST

• Claimed CAs on a boat used for a floating restaurant. HMRC denied.

The boat is the structure which the trade is carried out on. Not an asset used to carry out the trade

Question 3

B & E Security Ltd v HMRC

Answer 3

S
25

Installed a control room for security surveillance. Undertook wall strengthening for installation of specialist systems.

Question 4

Wimpy International Ltd v Warland

Answer 4

PREMISES TEST

Refurbished their restaurants. Claimed CAs on shopfront, wall panels, RAF, Lights.

• All denied except decorative wall murals & lighting

Question 5

Law Shipping Co Ltd v HMRC

Answer 5

Purchased a 2nd hand ship in a dilapidated state and payed a reduced price.

Repairs to make the ship “sea-ready” deemed Capital.

Repairs for wear and tear is Revenue.

Question 6

Odeon Theatres Ltd v Jones

Answer 6

Purchased an dilapidated cinemas due to war, was operating as a cinema and still repairing on an ongoing basis.

• Did not pay a reduced price for property
• Property was still usable

Question 7

James Allan Thornton v HMRC

Answer 7

A landlord owned block of flats. Tenants had obligation to repair £ maintain flats.

Flats were inhabitable & in significant disrepair. A £250k settlement was agreed.

HMRC said rev. Upper tribunal said CAPITAL due to him repair and maintain capital investment by restoring value

Question 8

Yarmouth v France

Question 9

Gunfleet Sands

Answer 9

Construction of windfarm. Spent alot on design, investigation, environmental studies, engineering surveys and project management fees and claimed CAs.

• Fees and studies that direct relate to how PMA was designed or installed qualifies

Question 10

Laskers Home Furnishings v Jackson

Question 11

Cole Brothers v Philips

Answer 11

COMPLETENESS TEST

Added additional lighting to an building already with light.

It would have been complete & fit for use without additional lighting