Best Holdings Ltd v Luff, [1998] STC 357, EWHC
Citation: Best Holdings Ltd v Luff, [1998] STC 357, EWHC
Rule of thumb: If a business is being used for a commercial purpose which is not one of the registered purposes which the building can be used for, or is not listed as the organisation’s trade, can expenses in carrying this out be deducted from turnover in calculating profits? No, if the building does not have this as the purpose (if the formalities are not in place) then these expenses cannot be deducted.
Judgment:
‘A building may be in use for the purposes of a trade which qualifies it for allowances though it is in use at the same time (and indeed more intensively) for another non-qualifying trade. The use of a building for dual purposes, one qualifying and one not, may qualify the building for allowances so long as the use for the qualifying purpose is not small or insignificant and such that it could not reasonably be brought within the Act... In this case what is critical is the nature of the enterprise intended to be carried on and actually carried on by Bestway at the buildings and the role played by the stock in that enterprise. For a building is only used for storage if the purpose of keeping goods there is their storage as an end in itself: there is no such use for storage if the goods are kept there for some other purpose: consider Kay v. Burrows and Others [1931] AC 454. All the stock in the present case is kept in the buildings, not for storage, but for sale. No goods are reserved or withheld for future use: they are all likewise available for sale and intended to be sold as soon as the turnover allows. For practical reasons only part of the stock can be made physically available for self-service by customers; but that does not alter the fact that the back-up stock is intended to be made immediately available as soon as required to meet demand. In short, as it seems to me, ‘storage’ in s 7(1)(f) means keeping in storage as a purpose and end in itself, and does not extend to such storage as is merely a necessary and transitory incident of the conduct of the business of a wholesale supermarket. The goods enter the buildings upon their final journey to the customers. The 6-8 weeks of stock at any time in the buildings may be likened to stock on an extension to the open shelves or on a conveyor belt to the open shelves’, Lightman J
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