This decision was an important win for HMRC, which brought along a three-strong legal team including two KCs and a barrister, to defend its case, as a loss could have thrown the capital allowances regime into confusion.

The Supreme Court justices unanimously allowed HMRC’s appeal in Orsted West of Duddon Sands (UK) Limited & Ors in a case which deliberated the use of the word ‘on’ in the context of capital allowances.

Orsted owns and operates offshore windfarms across the UK for the generation and sale of electricity, and four of its group companies were involved in this long-running tax dispute case. These were Gunfleet Sands, Gunfleet Sands II, Walney (UK) Offshore Windfarms, and Orsted West of Duddon Sands (WODS), which together incurred expenditure of approximately £48m in relation to the construction of offshore wind farms for various surveys and studies that supported the creation.