In Senex Investments Ltd v Revenue & Customs [2015] TC04312 the FTT allowed a Business Premises Renovation Allowance (BPRA) claim for a former church.

The question was whether a derelict building, formerly a church used by the Wesleyan Reform Union (“WRU”), was a Qualifying Building in terms of the BPRA under section 360C Capital Allowances Act 2001. That is whether the building had last been used:

(i) for the purposes of a trade, profession or vocation, or

(ii) as an office or offices (whether or not for the purposes of a trade, profession or vocation)” as required by s360C Capital Allowances Act (CAA) 2001.

HMRC’s technical note of 18 July 2013 described “BPRA’s policy purposes” as follows:-

“Boarded-up rows of derelict shops and empty business properties can be a common sight in the most deprived areas of the UK. The objective of BPRA is to bring such empty or longer term derelict business property back into productive use. The policy purpose of BPRA is, therefore, to foster the regeneration of deprived areas in the UK, 20 by encouraging private investment in those areas, in order to increase local enterprise and employment. BPRA is also designed to support the redevelopment of brownfield sites so reducing pressure on greenfield sites.”

HMRC argued that the background to BPRA was to address the mischief of unused shops and said that it is clear that the allowance relates to business premises.

The FTT found that the term ‘trade, profession or vocation’ had no specific qualification within s360C such as the carrying out of activities with a view to realising a profit as is the case in some other areas of UK tax law (e.g. s169S of the Taxation of Chargeable Gains Act 1992).

It decided after considering the WRU's Constitution and other documents and intentions that its church was conducted on commercial principles and constituted a trade. The WRU was an unincorporated association which carried on a trade and the old church was in a derelict state in a disadvantaged area. It met what Parliament sought to achieve and therefore the premises was a qualifying building.

It found also that the Vestry was used as an office.


Business Premises Renovation Allowance

Senex Investments Ltd v Revenue & Customs [2015] TC04312