Supreme Court - Decides in favour of HMRC

The judgement in the highly anticipated Capital Allowances case of Orsted West of Duddon Sands (UK) Limited and others v HMRC - colloquially known as the 'Gunfleet Sands case' - has now been published - Wednesday 15 April 2026.

This was one of a couple of key capital allowances cases progressing through the courts at the moment.  This case decision, from the highest UK Court, regarding certain pre-development costs (on design studies and reports) has determined that these studies were outside the scope of "expenditure on the provision of plant and machinery" under s.11 CAA2001.

Having sat in court listening to the first day of the hearing, and contrary to much of industry expectations since the appeal by HMRC of the earlier Court of Appeal decision, it was rather a surprise outcome. 

Lady Rose published her decision, unanimously supported by the other four Justices, that now limits the extent of eligible costs stating that "I do not regard these studies and surveys as close to the boundary between what should be regarded as “on” plant and what is too far away from the plant itself to be so regarded.  They do not fall within the statutory wording and I would therefore allow the appeal."

If you would like to discuss any property tax matters or specific queries relating to the above information, and how it might impact you or your projects then please do contact the team on 0345 230 6450 or [email protected]. We look forward to speaking with you soon.