Plant and machinery is not defined exhaustively anywhere. The legislation lists things that are included and things that are not, and the gap between them has been filled by a century of case law asking one question: does the item function as apparatus with which the business is carried on, or is it the setting in which the business is carried on?
The function test
Apparatus used for carrying on the business is plant; the premises in which it is carried on are not. That distinction decides most arguments. A cold store's insulated structure has been held to be plant because it performs a function in the trade rather than merely housing it, while an ordinary warehouse wall is setting. Decorative items in a restaurant have qualified where atmosphere was part of what the customer was buying. The test is about function in the particular trade, which is why the same item can qualify for one business and not another.
What the legislation includes and excludes
GOV.UK's own list is a useful starting point: equipment, machinery, business vehicles including cars, the costs of demolishing plant and machinery, parts of a building considered integral, some fixtures such as fitted kitchens and bathroom suites, and alterations to a building needed to install plant or machinery. Repairs are excluded and are claimed as an ordinary business cost instead. Land, and buildings themselves, are excluded from plant and machinery allowances, though structures and buildings allowances may apply to the latter.
The items companies get wrong
Software is plant, and often overlooked. Alterations incidental to installing plant qualify, so the cost of cutting an opening to fit a new machine is claimable even though building work generally is not. Moveable partitioning has qualified where it is genuinely moved; fixed partitioning has not. And the fixtures in a second-hand building may already have been claimed by a previous owner, which limits what the new owner can claim and is the first thing a competent adviser checks.
Questions people ask about capital allowances plant and machinery
What counts as plant and machinery?
Items kept for use in the business that function as apparatus with which the trade is carried on, rather than as the setting for it. GOV.UK lists equipment, machinery, business vehicles, integral features, some fixtures and alterations needed to install plant.
Are buildings plant and machinery?
No. Buildings and land are excluded from plant and machinery allowances, although parts of a building that are integral features do qualify, and structures and buildings allowances may apply to the fabric.
Is software plant?
Yes, computer software qualifies for plant and machinery allowances, which is one of the more commonly missed claims in an owner-managed company.