Capital allowances - fixed structures

HMRC have issued Revenue & Customs Brief 32/12: Plant and Machinery Allowances: polytunnels. It contains details of changes to HMRC policy regarding the treatment of polytunnels. 

HMRC viewed polytunnels as fixed structures and/or premises or settings rather than qualifying plant and machinery. They now accept that depending on use 'polytunnels that are neither ‘fixed structures’ nor premises/setting should qualify for plant and machinery capital allowances under Part 2 of CAA.'

HMRC have stated that they are 'unable to accept the proposal by representative bodies that all polytunnels should be regarded as plant, because the uses to which polytunnels may be put by businesses are extremely varied, and farming techniques involving polytunnels may, of course, continue to evolve over time.' The treatment will be decided on a case by case basis dependent on the use of the polytunnel.

They have revised the text of manual CA 22090 giving examples of when they consider that capital allowances can be claimed because the polytunnel is not a fixed structure. They comment that where a crop is grown in the ground then, 'as a matter of fact, the same ground cannot be continually reused.' They go on to say 'After the relevant period of time the crops must be planted elsewhere and the polytunnels will, therefore, be moved to the new location. HMRC will accept that, in such circumstances, the better view is that the polytunnels are not fixed structures, but are rather apparatus or plant, used in the qualifying activity.'

They then state if 'the crops are grown in raised beds (grow bags on trestle tables, for example) then there is no need or expectation that the crops will ever need to be grown elsewhere. In such situations it is far more likely that the polytunnels should properly be regarded as fixed structures and, as such, they will be unable to qualify for plant and machinery allowances.'

HMRC will settle claims in accordance with the revised guidance.