B & E Security Systems Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 26 March 2010
Neutral citation: [2010] UKFTT 146 (TC)
Overall AI summary confidence: medium
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: medium
This appeal concerned whether costs of constructing and altering a bespoke control room to house surveillance plant and equipment were "capital expenditure on plant" because the alterations were incidental to installation under the relevant capital allowances provision. The Tribunal found a sufficient factual nexus between the plant and the control-room works, that the works were required by contract/standards, and that the identified construction costs (£61,173) were not disproportionate to the plant installation. The appeal was allowed and those alteration costs were treated as incidental and within the statutory provision.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
Alterations to an existing building can qualify as incidental to the installation of plant and machinery where there is a close causative nexus between the plant acquisition and the building works, the works are required to enable the plant to serve its intended purpose (for example by contract or standards), and the cost of the works is not disproportionate to the installation. The timing of the works (whether before or after plant acquisition) is not determinative.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal indicated that proportionality of alteration costs to plant costs is a relevant consideration and that compliance with external specifications or lack of discretion as to the extent of works may support a finding that alterations are incidental rather than merely consequential.
Warning
The chunk is repetitive and contains duplicated passages and minor inconsistencies in the stated totals (£63,050 disputed vs Tribunal's £61,173 finding). Notes are repetitive and contain minor inconsistencies in stated totals (e.g. £63,050 disputed vs Tribunal finding of £61,173).