Does your business use a polytunnel or glasshouse?

In the past the Taxman has refused to allow a tax deduction for the  cost of such structures, on the basis that greenhouses are  buildings. A greenhouse is generally expected to last several  years, so the cost of the structure should be treated in the business  accounts as ‘capital’ rather than as a ‘revenue’ expense. The cost of  capital items cannot be deducted from annual profits, as the total  expenditure must be spread over the life of the asset, using capital  allowances. However, no capital allowances are given for the cost of  buildings and similar structures (as opposed to the equipment they  contain).

Now the Taxman has changed his mind. Polytunnels can  qualify for capital allowances in certain circumstances, such as where  the tunnel is moved around to aid the growth of particular crops in  different areas at different times. If the primary function of the  polytunnel is to provide shelter for livestock or stores, it will be  regarded as ‘premises’ and not qualify for capital allowances.

A glasshouse may qualify for capital allowances if it contains, as  part of the structure, permanently installed computer controlled  equipment that automatically adjusts the heat and humidity inside the  glasshouse. Unheated glasshouses will not qualify for capital  allowances, as the Taxman views these as fixed buildings which happen  to be made of glass.

 The good news is that this change of approach comes into effect  immediately, so all open claims for capital allowances on polytunnels  or glasshouses can be settled in line with the Taxman’s new guidance.  If you have had a claim for capital allowances refused based on the  old guidance, you can ask the Taxman to reconsider your claim.