We were appointed by a large pharmaceutical company to review a recent £19m development of a highly automated greenhouse facility which also included offices, laboratories, and processing areas.

In reviewing the development, we had to consider the case law precedents, together with the additional guidance from HMRC regarding the extent to which greenhouses can be considered ‘plant’ in their entirety (CA 22090 and CA 23785). However, as there were clearly non-automated areas of the development, we also needed to consider the application of Research & Development capital allowances for areas where R&D activities were being undertaken (subject to the appropriate tests), along with the more commonly identified plant & machinery allowances, and structures and buildings allowances.

A strict NDA prevents us sharing names, photos, or details regarding the nature of the works, but we can disclose the findings which resulted in over £14m of capital allowances, £1m of R&D capital allowances, and a further £3m of structures and buildings allowances. In total, around 95% of the total expenditure was secured as qualifying for tax relief.

We have also worked with garden centres utilising a variety of greenhouse structures, for which they had been advised to claim capital allowances on all of the associated costs. We would urge caution with this approach and ensure that the development is reviewed against the relevant case law and HMRC guidance.

Greenhouse

CASE STUDY