When You Think ‘the Chips are Down’, the Potatoes Take the Win in HMRC Case

06 Sep 2021

By Mike Atkin, Rural Manager

Tax legislation is clear on the definitions of a building and what qualifies for plant and machinery, however this became something HM Revenue and Customs wished to challenge in a recent case that saw the taxpayer win.

HMRC Case, Tax payer wins

In the case in question, the farmer had incurred costs of £300,000 on a potato store, which from the outside looked like a commercial warehouse. The various structural elements within the store ensured the quality of the potatoes were maintained for a longer period than ordinarily expected, as the potatoes were sold to a crisp manufacturer. The farmer claimed capital allowances on the basis the storage was plant because it carried out a critical function – storing potatoes in the optimum condition until needed.

In the case, HMRC wished to argue that the expenditure on the storage for produce was that of a building, in which the store was the premises for the taxpayer’s trade, however, this was rejected. All machinery within the store also functioned as part of the whole asset and was integral to ensuring the quality of the potatoes.

This case was the second in recent years, the first involving the construction of a grain store, and this summer being that of a cold potato store.

Both cases highlight the importance of understanding the nature of the business, the expenditure and the tax legislation. At WR Partners, we work with like-minded individuals and businesses obtaining the maximum reliefs available in an ever-changing climate of tax changes and pressures on government finances.

If you would like to have a chat with one of our team of rural business specialists to find out more about the tax relief that could be available for your business, please contact us on or call us on 08000 664 664.

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