Wind Farm: Capital Allowances Case – Supreme Court Judgment of Orsted West of Duddon
Sands V HMRC (Gunfleet Sands)
On 15 April 2026, The Supreme Court ruled unanimously in favour of HMRC’s appeal against
the Court of Appeal’s decision that all environmental surveys and studies qualified for plant
and machinery allowances. The Supreme Court’s reasoning behind this decision was that
they considered the Court of Appeal’s view on the language of “on the provision of” was too
broad and that the fact the requirement for the expenditure must be “on” the provision of
plant indicates a narrower test is necessary.
Therefore, The Supreme Court’s judgment is in line with the Upper Tribunal’s judgment
which was then overturned by the Court of Appeal.
The disputed expenditure is as follows:
a. Landscape, seascape and visual assessments,
b. Benthos studies,
c. Ornithology and collision risk studies,
d. Fish and shellfish studies,
e. Marine mammal studies,
f. Archaeology, wrecks and cultural heritage site studies,
g. Noise assessment studies,
h. Telecoms and radar interference studies,
i. Traffic, transport and tourism,
j. Socio-economic and tourism assessments.
The above surveys and studies were held as not satisfying “on” the provision of the
windfarms.
Lovell Consulting’s View:
The Supreme Court’s judgment is surprising. The wind farm was a single plant entity. If it was
a single entity then the survey fees would logically have been “on” plant. This was largely the
reasoning of the First Tier Tribunal and the Court of Appeal. The Supreme Court have found
in favour of the Upper Tribunal. It has come down to a legal interpretation of the word “on”
and more remote survey fees are “off” the agenda. It is also surprising that cost allocation
decided in the J D Wetherspoons Court of Appeal decision was not referenced.
