Finance Act 1994

117 Expenditure on machinery or plant

(1) At the end of section 83 of the [1990 c. 1.] Capital Allowances Act 1990 (interpretation of Part II, which relates to machinery and plant) there shall be added—

“(7) Schedule AA1 (which excludes certain expenditure from the expression “expenditure on the provision of machinery or plant”) shall have effect.”and before Schedule A1 to that Act there shall be inserted—

“Schedule AA1 Exclusions from expenditure on machinery or plant

Buildings

1 (1) For the purposes of this Act expenditure on the provision of machinery or plant does not include any expenditure on the provision of a building.

(2) For the purposes of this Schedule “building” includes any asset in the building—

(a) which is incorporated into the building, or

(b) which, by reason of being moveable or otherwise, is not so incorporated, but is of a kind normally incorporated into buildings;

and in particular includes any asset in or in connection with the building included in any of the items in column 1 or column 2 of the following Table (“Table 1”).

(3) Sub-paragraph (1) above does not affect the question whether expenditure on the provision of—

(a) any asset falling within column 2 of Table 1,

(b) any cold store,

(c) any caravan provided mainly for holiday lettings,

(d) any building provided for testing aircraft engines run within the building, or

(e) any moveable building intended to be moved in the course of the trade,

is for the purposes of this Act expenditure on the provision of machinery or plant.

(4) Table 1 is to be read subject to the notes following it.

Table 1

Assets included in the expression ‘building’	Assests so included, but expenditure on which is unaffected by the Schedule
A. Walls, floors, ceilings, doors, gates, shutters, windows and stairs.	1. Electrical, cold water, gas and sewerage systems— (a) provided mainly to meet the particular requirements of the trade, or (b) provided mainly to serve particular machinery or plant used for the purposes of the trade. 2. Space or water heating systems; powered systems of ventilation, air cooling or air purification; and any ceiling or floor comprised in such systems.
B. Mains services, and systems, of water, electricity and gas.	3. Manufacturing or processing equipment; storage equipment, including cold rooms; display equipment; and counters, checkouts and similar equipment. 4. Cookers, washing machines, dishwashers, refrigerators and similar equipment; washbasins, sinks, baths, showers, sanitary ware and similar equipment; and furniture and furnishings.
C. Waste disposal systems.	5. Lifts, hoists, escalators and moving walkways. 6. Sound insulation provided mainly to meet the particular requirements of the trade.
D. Sewerage and drainage systems.	7. Computer, telecommunication and surveillance systems (including their wiring or other links). 8. Refrigeration or cooling equipment.
E. Shafts or other structures in which lifts, hoists, escalators and moving walkways are installed.	9. Sprinkler equipment and other equipment for extinguishing or containing fire; fire alarm systems. 10. Burglar alarm systems. 11. Any machinery (including devices for providing motive power) not within any other item in this column.
F. Fire safety systems.	12. Strong rooms in bank or building society premises; safes. 13. Partition walls, where moveable and intended to be moved in the course of the trade. 14. Decorative assets provided for the enjoyment of the public in the hotel, restaurant or similar trades 15. Advertising hoardings; and signs, displays and similar assets. 16. Swimming pools (including diving boards, slides and structures on which such boards or slides are mounted).

Notes:

1 An asset does not fall within column 2 if its principal purpose is to insulate or enclose the interior of the building or provide an interior wall, a floor or a ceiling which (in each case) is intended to remain permanently in place.

2 “Electrical systems” include lighting systems.

Structures, assets and works

2 (1) For the purposes of this Act expenditure on the provision of machinery or plant does not include any expenditure on—

(a) the provision of structures or other assets to which this paragraph applies, or

(b) any works involving the alteration of land.

(2) This paragraph applies to any structure or other asset which falls within column 1 of the following Table (“Table 2”).

(3) Sub-paragraph (1) above does not affect the question whether—

(a) any expenditure falling within column 2 of Table 2, or

(b) any expenditure on the provision of any asset of a description within any of the items in column 2 of Table 1,

is for the purposes of this Act expenditure on the provision of machinery or plant.

(4) Table 2 is to be read subject to the notes following it.

Table 2

(1)	(2)
Structures and assets	Expenditure which is unaffected by the Schedule
A. Any tunnel, bridge, viaduct, aqueduct, embankment or cutting.	1. Expenditure on the alteration of land for the purpose only of installing machinery or plant.
B. Any way or hard standing, such as a pavement, road, railway or tramway, a park for vehicles or containers, or an airstrip or runway.	2. Expenditure on the provision of dry docks. 3. Expenditure on the provision of any jetty or similar structure provided mainly to carry machinery or plant.
C. Any inland navigation, including a canal or basin or a navigable river.	4. Expenditure on the provision of pipelines, or underground ducts or tunnels with a primary purpose of carrying utility conduits. 5. Expenditure on the provision of towers provided to support floodlights.
D. Any dam, reservoir or barrage (including any sluices, gates, generators and other equipment associated with it).	6. Expenditure on the provision of any reservoir incorporated into a water treatment works or on the provision of any service reservoir of treated water for supply within any housing estate or other particular locality.
E. Any dock.	7. Expenditure on the provision of silos provided for temporary storage or on the provision of storage tanks. 8. Expenditure on the provision of slurry pits or silage clamps.
F. Any dike, sea wall, weir or drainage ditch.	9. Expenditure on the provision of fish tanks or fish ponds.
G. Any structure not within any other item in this column.	10. Expenditure on the provision of rails, sleepers and ballast for a railway or tramway. 11. Expenditure on the provision of structures and other assets for providing the setting for any ride at an amusement park or exhibition. 12. Expenditure on the provision of fixed zoo cages.

Notes:

1 “Dock” includes—

(a) any harbour, wharf, pier, marina or jetty, and

(b) any other structure in or at which vessels may be kept or merchandise or passengers may be shipped or unshipped.

2 An industrial structure, that is, anything (other than a building) which is or is to be an industrial building or structure as defined in section 18, is not within item G in column 1; and that section, as it applies for the purposes of this note, shall have effect as if—

(a) in subsection (1)(b), after “electricity” there were inserted “gas”,

(b) after that paragraph there were inserted—

“(ba) for the purposes of a trade which consists in the provision of telecommunication, television or radio services; or”, and

(c) in subsection (9), after the definition of “foreign plantation”, there were inserted—

““gas undertaking” means an undertaking for the extraction, production, processing or distribution of gas”.

Land

3 (1) For the purposes of this Act expenditure on the provision of machinery or plant does not include expenditure on the acquisition of any interest in land.

(2) This paragraph does not apply for the purposes of Part II to any asset which is so installed or otherwise fixed in or to any description of land as to become, in law, part of that land.

General exemptions

4 Paragraphs 1(1) and 2(1) above do not apply to any expenditure to which section 67, 67A, 68, 69, 70 or 71 applies.

Interpretation

5 (1) In this Schedule—

(a) “structure” means a fixed structure of any kind, other than a building, and

(b) references to the provision of any building, structure or other asset include references to its construction or acquisition.

(2) Nothing in this Schedule affects the question whether expenditure on the provision of any glasshouse which is constructed so that the required environment (that is, air, heat, light, irrigation and temperature) for growing plants is provided automatically by means of devices which are an integral part of its structure is, for the purposes of this Act, expenditure on the provision of machinery or plant.

(3) The definition of “land” in Schedule 1 to the [1978 c. 30.] Interpretation Act 1978, in its application for the purposes of this Schedule, shall have effect with the omission of the words “buildings and other structures”; and, subject to that, “interest in land” in paragraph 3 above has the same meaning as in Chapter VI of Part II.”

(2) This section shall have effect in relation to expenditure incurred on or after 30th November 1993 unless—

(a) it is incurred before 6th April 1996 in pursuance of a contract entered into before 30th November 1993, or

(b) it is incurred before 6th April 1996 in pursuance of a contract entered into, for the purpose of securing that the obligations under a contract entered into before 30th November 1993 are complied with, on or after 30th November 1993.