Cobalt Data Centre 2 LLP v Revenue and Customs Comrs

Subject Matter

REVENUE — Corporation tax — Capital allowances — Taxpayers acquiring assignment of rights under construction contract in respect of site falling within enterprise zone — Two data centres subsequently built on site — Taxpayers submitting partnership tax returns claiming enterprise zone allowances in respect of expenditure incurred acquiring rights under contract — Commissioners determining taxpayers not entitled to allowances claimed — Whether expenditure incurred in making advance payments incurred under contract entered into within ten years of designation of site as enterprise zone — Whether taxpayers carrying on business with “a view to profit” — Whether advance payments made by developer to contractor being advance payment for construction works to be undertaken — Whether buildings constructed under relevant contract — Whether Commissioners acting contrary to published practice giving rise to breach of taxpayers' legitimate expectations – Whether taxpayers entitled to allowances sought — Capital Allowances Act 2001, ss 286, 296, 298, 356, 357 — Income Tax (Trading and Other Income) Act, s 863

[2019] UKUT 342 (TCC); [2020] STC 23, UT

REVENUE — Income tax — Capital allowances

[2020] UKUT 356 (TCC), UT

REVENUE — Corporation tax — Capital allowances — Taxpayers constructing two buildings within enterprise zone — Taxpayers claiming entitlement to enterprise zone allowances on expenditure incurred — Revenue refusing to grant allowances and issuing closure notices — Contract providing for works options — Parties purporting to vary contract by providing for construction of materially different building on different site, at different price — Whether contractual alterations amounting to creation of new contract — Whether expenditure incurred under contract made within 10 year period — Whether taxpayers entitled to enterprise zone allowances — Capital Allowances Act 2001 (c 2), s 298

[2022] EWCA Civ 1422; [2022] STC 2041; [2022] WLR(D) 435, CA

REVENUE — Corporation tax — Capital allowances — Claim for enterprise zone allowance in respect of buildings built more than 10 but fewer than 20 years after site included in zone — Whether expenditure on buildings “incurred under a contract entered into” within 10 years of site’s inclusion in zone — Whether expenditure incurred under such contract if incurred pursuant to alteration of contract made more than 10 years after site’s inclusion in zone — Capital Allowances Act 2001 (c 2), s 298(1)(b)

[2024] UKSC 40; [2024] 1 WLR 5213; [2025] 3 All ER 267; [2025] STC 1, SC(E)

CONTRACT — Formation — Variation — Parties choosing to bring about alteration to contract — Whether such alteration to be characterised as variation or replacement of contract — Whether parties’ intentions determinative

[2024] UKSC 40; [2024] 1 WLR 5213; [2025] 3 All ER 267; [2025] STC 1, SC(E)

Appellate History