Definition of plant


T

Troy Steadman

It's nice to see you posting again Martin but I can't let you get away
with this:

11 General conditions as to availability of plant and machinery
allowances

(1) Allowances are available under this Part if a person carries on a
qualifying activity and incurs qualifying expenditure.

<snip>

(4) The general rule is that expenditure is qualifying expenditure if-

(a) it is capital expenditure on the provision of plant or machinery
wholly or partly for the purposes of the qualifying activity carried on
by the person incurring the expenditure, and

(b) the person incurring the expenditure owns the plant or machinery as
a result of incurring it.

(from Capital Allowances Act 2001)

http://www.legislation.hmso.gov.uk/acts/acts2001/10002--d.htm

Martin said:
The key date (except in some very unusual cases) is when the
obligation to pay became unconditional. So the delay in delivering
scanner doesn't alter the fact that it was eligible for FYA on 28
Mar - i.e. in the earlier yeara/c's.
Can you can claim IBA once you are committed to paying the builder
before the foundations have been put in?

Can a you claim FYA on machinery that hasn’t been installed?

Can Elizabeth’s client claim FYA on a turnkey IT system that hasn’t been
finished let alone delivered?

Can you “own” plant that:
1) doesn’t exist?
2) doesn’t exist as plant?




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E

Elizabeth Smith

Troy said:
It's nice to see you posting again Martin but I can't let you get away
with this:
Can Elizabeth’s client claim FYA on a turnkey IT system that hasn’t been
finished let alone delivered?

Can you “own” plant that:
1) doesn’t exist?
2) doesn’t exist as plant?
I am amazed that my "harmless" question is posing an intellectual
challenge here, or should I say providing entertainment for the whole
festive season! ;-)

I am beginning to appreciate the huge complexity of your job...

ES
 
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M

Martin

Troy Steadman said:
It's nice to see you posting again Martin but I can't let you get away
with this:
With what? I suspect you welcome my post precisely because you see an
opportunity not to let me get away with anything :-( That's not very
festive, Troy ;-)

Can you can claim IBA once you are committed to paying the builder
before the foundations have been put in?
I thought we were discussing Plant & Machinery - so where does IBA come into
it? My reference was to building a house (i.e. non-industrial, and indeed
non-business, for the purchaser). And my comments were addressing (a)
nature of contracts, which if well written will show what property passes
with each stage payment, and (b) appropriate accounting treatment by the
builder.
Can a you claim FYA on machinery that hasn't been installed?
Yes - assuming it's going to be put into use for the trade. It might be
under-going commissioning, or waiting for the final non-destructive
turkey-test.
Can Elizabeth's client claim FYA on a turnkey IT system that hasn't been
finished let alone delivered?
E's case is complicated by the fact that the initial payment appears to be a
rather vague deposit, rather than a specifically assigned stage-payment. If
E Ltd went bust, would the client claim cash or a part-finished system from
the receiver? And under what circumstances is the deposit returnable?

Can you "own" plant that:
1) doesn't exist?
Possibly - but I haven't claimed you can. I did, though, suggest that
claiming FYA on the scanner, by virtue of it having been invoiced and paid
for (but not delivered) was correct.

If you think of all the widgets wizzing up and down the motorway on the
backs of lorries at year-end midnight, who owns them? They've been
despatched and invoiced, so are off the books of the supplier, but happen
not to have arrived at the customer. So they should be in the customer's
books - based on the invoice date. And he's got 30 days to pay - not 60
(assuming the usual common trading terms).
2) doesn't exist as plant?
I don't see why not - it is the date that expenditure is actually incurred
which matters for entitlement to FYA. And "incurred", I assume, means
liability to pay, if this occurs before actual payment, which it mostly
will.

You do need, though, to distinguish between stage payments, which are for
something tangible, and deposits which may not be.

I'm still not clear with what you didn't what me to get away. Apart from
going to excessive lengths to avoid ending sentences with prepositions :-(

Now - where's my cold turnkey sandwich?
 

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