In HMRC v SSE Generation Ltd [2021] EWCA Civ 105 (1 February) the Court of Appeal considered HMRC’s appeal against the Upper Tribunal’s decision that expenditure on various structures forming part of a hydroelectric power generation scheme qualified for capital allowances as plant and machinery.
The only items which remained in dispute were conduits of various kinds that channelled water to the main reservoir the headrace that carried water under increasing pressure from the reservoir to the turbine and the tailrace that carried water away from the turbine. It was common ground that all of the disputed items were ‘plant’ according to its common law definition so the only issue was whether the expenditure was excluded by CAA 2001 s 22.
The court first considered the interaction of the two exclusions in s 22. It held that if the plant in question was a structure or an asset it is either excluded by s 22(1)(a) (structures and assets within List...
