G Pratt & Sons v Commissioners for Her Majesty's Revenue and Customs

Facts

The appellant, G Pratt & Sons, is a family farm partnership which has been in the same family since the 1880s and whose output is 90% liquid milk, the remainder beef, eggs and arable produce. The working buildings are grouped around a farmyard at the end of a drive running to the nearest public road, with a branch running to the farmhouse. The drive is used by suppliers delivering to the working buildings and daily by a 20,000 litre tanker sent by the farm's dairy customer to collect milk from holding tanks at the farmyard. The drive had last been tarmacked about 30 years earlier and had deteriorated to the point where the local refuse collectors refused to drive up it. Over three to four weeks the top layer of tarmac was removed until a stable sub-surface was reached, the sub-surface repaired using broken-up pieces of the surface layers, and 239 of the drive's 280 metres re-surfaced, with new kerbing added as necessary; the 41-metre section to the farmhouse was not re-surfaced, and the drive was neither widened nor strengthened. On 11 May 2010 HMRC amended the partnership return under section 28B of the Taxes Management Act 1970, increasing the 2007-08 partnership profit by £37,286, from £12,244 to £49,530, on the basis that the expenditure was capital. Negotiation settled most of the disputed issues, leaving only whether the £23,300 spent on re-surfacing the drive was a deductible repair.