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UK tax weekly: Supreme Court narrows windfarm survey allowances; UT on ring-fence and NICs; HMRC CIR, manuals and double tax treaty updates; CBAM consultation; case trackers, 16 April 2026

Published on: 16 April 2026

Published by a LexisNexis Tax expert
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Companies and corporation tax

Supreme Court decides that expenditure on environmental surveys and studies for windfarms was not incurred ‘on’ the provision of plant for capital allowances purposes (HMRC v Orsted West of Dutton Sands (UK) Limited)

In Orsted West of Dutton Sands (UK) Limited [2026] UKSC 12, the Supreme Court, unanimously, upheld HMRC’s appeal, finding that spending on environmental surveys and studies carried out for the development of offshore windfarms does not attract capital allowances. The Court held the expenditure was not incurred ‘on’ the provision of plant, as that phrase in section 11(4) of the Capital Allowances Act 2001 (CAA 2001) demands a sufficiently tight nexus with the plant itself, which was absent. Rather, the costs bore only a peripheral link to delivering the windfarm assets and therefore fell beyond the limits of qualifying capital expenditure. The decision confirms a strict approach to the statutory requirement that expenditure be incurred ‘on’ providing plant, and rejects wider, necessity-based readings. It therefore affords clarity for future capital allowance claims...

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