JD Wetherspoon, the managed pub operator, has failed in an attempt to claim capital allowances for work partitioning toilets at two of its pubs. The judgement could have ramifications across the sector for companies that make alterations to their premises. HM Revenue & Customs (HMRC) won its appeal against a previous ruling that said the firm was able to claim allowances offset against the cost of adding partition dividers in its toilets. HMRC argued that taxpayers should not contribute to the cost of such a project. The First Tier Tribunal initially backed HMRC’s claim, as long as the partitions weren’t made from sturdy material such as bricks, but JD Wetherspoon appealed and won. HMRC then lodged its own successful appeal at the Upper Tribunal. The claim had been a test case for JD Wetherspoon. Quoted in the Daily Telegraph, Richard Mannion, head of tax at financial advisory service Smith & Williamson, said the case showed the “disconnect between what an ordinary business person would expect to be an allowable tax deduction and what the complex tax legislation actually allows.” Mannion said the case would involve million in tax when extended to other businesses.