The respondent company was entitled to claim capital allowances for expenditure incurred in the construction of a hydroelectric power scheme and some elements of the scheme were not properly described as tunnels or aqueducts so were not excluded from capital allowances. 

The respondent company (SSE) claimed capital allowances on expenditure incurred when constructing the Glendoe Hydro Electric Power Scheme. HM Revenue and Customs (HMRC) disputed £227 million of SSE's claimed capital allowances for tax years 31 March 2006 to 31 March 2012, on the basis that certain assets did not give rise to allowable expenditure under CAA 2001. SSE appealed.  

The First-tier Tribunal (FTT) held that SSE was entitled to claim allowances for some of the disputed items but upheld HMRC's view on others. HMRC appealed to the Upper Tribunal, who dismissed the appeal and allowed SSE's challenge to parts of the FTT's decision.,