Orsted West of Duddon Sands (UK) Ltd v Revenue and Customs Comrs

Subject Matter

REVENUE — Corporation tax — Capital allowances — Taxpayer companies generating and selling electricity from various wind farms — Taxpayers seeking to treat expenditure incurred in conducting studies for design and construction of wind turbines as "capital expenditure on provision of plant or machinery" — Whether studies qualifying expenditure — Capital Allowances Act 2001, s 11

[2023] UKUT 260 (TCC); [2024] STC 177, UT

REVENUE — Corporation tax — Capital allowances — Taxpayer companies generating and selling electricity from various wind farms — Taxpayers seeking to treat expenditure incurred in conducting studies for design and construction of wind turbines as “capital expenditure on provision of plant or machinery” — Whether studies qualifying expenditure — Whether expenditure deductible as pre-trading revenue expenditure — Capital Allowances Act 2001 (c 2), s 11 — Corporation Tax Act 2009 (c 4), s 61

[2025] EWCA Civ 279; [2025] 1 WLR 3887; [2025] 4 All ER 745; [2025] STC 563; [2025] WLR(D) 152, CA

REVENUE — Corporation tax — Capital allowances — Taxpayer companies operating windfarms — Taxpayers claiming capital allowances in respect of expenditure on environmental impact studies undertaken prior to windfarms becoming operational — Whether studies “qualifying expenditure” — Whether expenditure incurred “on the provision of” plant and machinery — Capital Allowances Act 2001 (c 2), s 11

[2025] EWCA Civ 279; [2025] 1 WLR 3887; [2025] 4 All ER 745; [2025] STC 563; [2025] WLR(D) 152, CA

REVENUE — Corporation tax — Appeal — Revenue issuing closure notices denying taxpayer companies’ claims to capital allowances but not amending relevant figures in taxpayers’ returns — Taxpayers appealing to First-tier Tribunal — Whether tribunal having jurisdiction to amend figures if not amended by revenue — Taxes Management Act 1970 (c 9), s 50 — Finance Act 1998 (c 36), Sch 18, para 34(3)

[2025] EWCA Civ 279; [2025] 1 WLR 3887; [2025] 4 All ER 745; [2025] STC 563; [2025] WLR(D) 152, CA

Appellate History

Commentary

Out-Law
Ruling indicates Upper Tribunal’s “narrow approach” towards windfarm capital allowances Case comment