In Paul Telfer v HMRC [2016] TC05350 the First Tier Tribunal (FTT) found that caravans which the taxpayer had to live in to carry out his employment duties did not qualify for capital allowances.

A person who is engaged in qualifying activities can claim capital allowances on qualifying expenditure on plant and machinery.  This is subject to a number of specific exclusions.  In particular, expenditure on buildings, structures and land do not qualify for capital allowances. 

  • The taxpayer was employed by the Caravan Club as an assistant warden.
  • This required him to live on site in a caravan which he provided.
  • The taxpayer claimed capital allowances on his caravans on the grounds that he carried on a qualifying activity (his employment with the Caravan Club) and that his expenditure was qualifying expenditure on plant.

The FTT found that:

  • The caravans were not necessarily excluded from capital allowances as they were not buildings or fixed structures.
  • Although the taxpayer could not have performed his employment duties without the use of the caravans, this was not enough to entitle him to capital allowances.
  • The caravans were not something by means of which his duties were carried on, but were merely the place where they were carried out.

The caravans were therefore not plant and did not qualify for capital allowances.


Our subscriber guide: What expenditure qualifies for plant & machinery allowances?

Case reference: Paul Telfer v HMRC [2016] TC05350