Court of Appeal decides that expenditure ‘on the provision of’ items in List C qualifies for capital allowances (Urenco Chemplants Ltd v HMRC)

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Tax analysis: In Urenco Chemplants Ltd and others v HMRC, the Court of Appeal found that the Upper Tribunal (UT) had erred in law in setting aside the First-tier Tribunal’s (FTT) decision that expenditure incurred by Urenco on the construction of a nuclear deconversion facility did not qualify for capital allowances. It also found that a drafting error, originating in the Tax Law Rewrite Project, had wrongly narrowed the scope of List C of section 23 of the Capital Allowances Act 2001 (CAA 2001), and that, on a proper construction of the provision, expenditure incurred ‘on the provision of’ List C assets should qualify for capital allowances.