Regulatory Other

The UK Court of Appeal issued its decision in Orsted West of Duddon Sands (UK) Ltd and others v CRC, largely finding in favour of the appellants including Orsted West of Duddon Sands (UK) Ltd. The ruling allows the companies to benefit from significant capital allowances on construction-related predevelopment and design expenditure for their offshore wind farms, including West of Duddon Sands, overturning an earlier Upper Tribunal decision that had disallowed around £48 million of such costs. This judgment clarifies that many of the essential studies and design activities undertaken to develop and construct the wind farm qualify as capital expenditure on the provision of plant and machinery for UK tax purposes.