CA 1997, 69 TC 575; [1997] STC 1167.
ACW operated various car-wash sites. Each site comprised a “wash hall", which was a building incorporating washing machinery and control equipment, and surrounding tarmac areas used for circulation, queuing and parking. The wash hall had an unusually shaped roof which enabled rain water to be retained and, after going through settling tanks and filters, to be used again for washing cars. The whole of the site was laid out in accordance with a special system which allowed for a very rapid throughput of vehicles, with provision for four vehicles to pass through the wash hall at one time. The site included pre-wash and post-wash pads, and vacuum machines for drivers to clean the interiors of their cars if they wished. The company claimed capital allowances on the full cost of each site as a single item of plant. The Inland Revenue rejected this: they accepted that some of the facilities would constitute plant and machinery but not the entire site.
It was held that an item used IN carrying on the business passes the “business use” test but is excluded as being plant if it use is as the premises FROM which the business is carried on. ACW’s appeal was dismissed as it was clear that part of the site were the premises from which the business traded. The fact that aspects of the building e.g. the water-efficient roof, performed a function in the business would not lead the entire building to be treated as plant.