The UK Supreme Court has ruled against Ørsted in a case over whether survey and study costs tied to offshore wind farm development can be claimed as capital allowances.

The judgment found that those expenses do not qualify for relief under the capital allowances regime. The court said the relevant spending must be closely tied to the provision of plant, and concluded that survey and study work did not meet that standard in the case before it.

In doing so, the Supreme Court reversed the earlier position taken by the Court of Appeal, which had previously found in favour of Ørsted. The latest decision followed an appeal brought by HMRC.

After the ruling, Ørsted said the outcome had made the investment environment less supportive for offshore wind and other major infrastructure projects in the UK. The company also said it would follow the decision and work with the authorities to settle the position of the projects affected by the case.

The developer added that it was still too early to determine the final outcome of those discussions, although it said the financial effect on the projects directly covered by the ruling was limited.

Ørsted also said it would need time to understand how the judgment would be applied before it could determine whether the decision might affect other projects. The company further called on the UK government to restart work on revising the relevant tax rules.