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HM Revenue and Customs Brief 32/12


HM Revenue and Customs -Tax Authorities

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3rd December 2012

Plant and Machinery Allowances: polytunnels

1.1 Previous view of HMRC

Section 22 of the Capital Allowances Act 2001 (CAA) specifically prohibits expenditure on the provision of a ‘fixed structure’ from qualifying as expenditure on plant or machinery (unless one or other of the exceptions in section 22 or 23 apply). HM Revenue & Customs (HMRC) previously considered that most polytunnels should aptly be viewed as fixed structures, and/or that, in some other cases, they might aptly be viewed as premises or setting, rather than as plant or machinery. However, this view was not entirely shared by businesses, tax practitioners or representative bodies, such as the National Farmers Union (NFU), NFU Scotland and British Summer Fruits.

1.2 Current view of HMRC

HMRC accept that the use of polytunnels, as a modern farming technology, has developed over time. Following discussions with the NFU, NFU Scotland and British Summer Fruits, HMRC also accept that some polytunnels are not most aptly classified as ‘fixed structures’ and that neither is it appropriate to regard some polytunnels as simply providing the premises or setting for the fruit growing activity. Given this, HMRC agree that polytunnels that are neither ‘fixed structures’ nor premises/setting should qualify for plant and machinery capital allowances under Part 2 of CAA.
HMRC have, however, been unable to accept the proposal by representative bodies that all polytunnels should be regarded as plant, because the uses to which polytunnels may be put by businesses are extremely varied, and farming techniques involving polytunnels may, of course, continue to evolve over time.
Which polytunnels may or may not qualify for plant and machinery allowances will depend on the facts of each case, including the exact use of the polytunnel in any particular business. However, HMRC consider that certain types of use will qualify for plant and machinery allowances, and will now issue revised guidance to its staff setting out the type of use that does not mean that allowances are prohibited, assuming that the other conditions for relief are met.

1.3 Revised guidance

CA 22090 is to be revised with immediate effect in accordance with the text below.

1.4 Open and settled cases

For all open claims HMRC will now consider those claims in line with the revised guidance below. Where information is held that enables the enquiry to be settled without further action, letters will be issued confirming that the matter is now settled in accordance with the updated version of CA 22090. In open claims where insufficient information is held, fact finding letters will shortly be issued and the cases will be considered in light of the updated guidance, once the further information has been received.

HMRC are aware that a small number of cases may have been settled where the business made a claim to plant and machinery allowances and the claim was refused in accordance with HMRC's view of the law at that time, although the claim would probably have been admitted, based on HMRC's updated view. Where a business has had a claim refused based on HMRC's previous view they should contact the office that dealt with the claim to ask for the matter to be reconsidered in light of this Revenue & Customs Brief.

1.5 CA 22090

CA22090 - Plant & Machinery Allowances (PMA): Buildings & structures: Glasshouses and Polytunnels


Most glasshouses are not plant or machinery. They are buildings or structures and so are excluded from plant or machinery allowances CA22010 and CA22020. In the case of Grays v Seymours Garden Centre (Horticulture) 67TC401 a planteria, which was effectively an unheated glasshouse, was held not to be plant.

Accept that a glasshouse and its attendant machinery are inter-dependent and form a single entity which functions as plant in a grower's business if the following conditions are satisfied:

A.The structure and the equipment were designed as one unit to operate as a single entity.

B.It incorporates extensive computer controlled equipment, without which the structure cannot operate to achieve the optimum artificial growing environment for the particular crops involved.

C.The equipment was permanently installed during the construction of the glasshouse.

D.The equipment includes computer systems which control:

  • boiler and piped heating systems,
  • temperature and humidity controls,
  • automatic ventilation equipment,
  • automatic thermal screens or shade screens.

Depending on the crops grown, the equipment may include:

  • equipment for carbon dioxide enrichment of the glasshouse atmosphere (for example for tomatoes or cucumbers),
  • hydroponic culture (for tomatoes and capsicums),
  • mobile benching or transport tables (for pot plant production),
  • lighting to control day length or to supplement natural light (for pot and cut chrysanthemums and plant propagators).

A glasshouse that qualifies as plant is likely to be used for year round growing of high value crops. Without the benefit of a closely controlled environment there would be a limited growing season around the summer season.


A polytunnel is usually a metal framed semicircular tunnel covered in polythene that is used predominantly by the farming and horticulture industry. If a polytunnel is a fixed structure it is excluded from plant or machinery allowances CA22020.

The exact use of the polytunnel can vary. As well as its use for growing plants, it may also be used to provide shelter for livestock, machinery or stores. In these cases it does not really matter whether the polytunnel is a fixed structure or not (although it is very likely to be fixed) because its primary, if not only, use is the provision of shelter and it will therefore comprise part of the premises or setting in which the qualifying activity is carried on CA21110.

However where the polytunnel is used for growing plants, whether or not it is a fixed structure will be crucial, because it is only possible to consider the function of a polytunnel in a qualifying activity where it is not a proscribed fixed structure CA22020.

Absent the prohibition in respect of fixed structures, it is accepted that in relation to the growing of plants a polytunnel does far more than just provide shelter from the elements. It can provide an enhanced growing environment for plants, not only increasing air and soil temperature and humidity, but also extending the crop growing season and protecting plants from insect infestations.

Neither 'fixed' nor 'fixed structure' is defined in the Capital Allowances Act. Anchor Intl (at [2005] STC 411 at 421) took the approach of applying the ordinary meaning to the term. Quite what the ordinary meaning of being 'fixed' amounts to is not entirely clear. There is a spectrum of potential definitions of 'fixed'. At one end of the spectrum 'fixed' could mean simply that the structure is set in place so that it does not move. At the other extreme it could mean that it is attached permanently in a certain place on the land such that it can never be moved intact.

Accordingly, it is necessary to look carefully at the facts of each case, including exactly how the polytunnel is to be used in the business.

In relation to strawberry and raspberry crops a key determinant will be the exact method of cultivation of the crops. Where strawberries and raspberries are grown in the ground then, as a matter of fact, the same ground cannot be continually reused. The maximum growing period for strawberries cannot usually be more than 4 years. For raspberries it can be slightly longer at 7 years. After the relevant period of time the crops must be planted elsewhere and the polytunnels will, therefore, be moved to the new location. HMRC will accept that, in such circumstances, the better view is that the polytunnels are not fixed structures, but are rather apparatus or plant, used in the qualifying activity.

However, where in relation to strawberries in particular, the crops are grown in raised beds (grow bags on trestle tables, for example) then there is no need or expectation that the crops will ever need to be grown elsewhere. In such situations it is far more likely that the polytunnels should properly be regarded as fixed structures and, as such, they will be unable to qualify for plant and machinery allowances.

In relation to other crops, similar careful consideration of the facts will be needed to determine whether or not the polytunnel is a fixed structure. For example, blackberries, gooseberries and black/redcurrants can be grown in the same location for ten years or more and in relation to such crops it is far more likely that the polytunnel will be a fixed structure.

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Article Published/Sorted/Amended on Scopulus 2012-12-10 09:06:36 in Tax Articles

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