The Upper Tribunal held that expenditure on various structures of a hydroelectric power generation scheme was eligible for plant and machinery capital allowances and dismissed HMRC’s appeal.  

The company (SSEG) claimed capital allowances on fixed asset expenditure in relation to the Glendoe Hydro Electric Power Scheme. Following enquiries by HM Revenue and Customs (HMRC), various closure notices for the years ending 31 March 2006 to 31 March 2012 concluded that SSEG’s taxable profits for those years had been understated, as capital allowances had been claimed on some £260 million of expenditure on the scheme, whereas only some £34 million was originally accepted by HMRC. 

The First-tier Tribunal (FTT) considered the tax treatment of various assets constructed by SSEG for the purpose of the scheme, comprising long-life infrastructure assets. SSEG