Orsted has warned that a UK Supreme Court ruling in a landmark tax dispute has weakened the business case for offshore wind and other infrastructure projects.
The court unanimously upheld an appeal by HM Revenue & Customs, rejecting Orsted’s claim for capital allowances on surveys carried out during the development of four offshore wind farms.
The surveys, which cost nearly £50m, were deemed ineligible under a narrower interpretation of the Capital Allowances Act 2001.
Earlier rulings, including a Court of Appeal decision, had supported Orsted’s position that the surveys qualified for tax relief. However, the Supreme Court ruled that the interpretation was too broad and did not align with the legislation.
The decision is expected to have wider implications for renewable energy and major infrastructure projects, which rely on extensive pre-construction surveys.
In a statement, an Orsted spokesperson said: “We respect the decision by the UK Supreme Court and will take the necessary steps to reach a final resolution with the authorities regarding the projects subject to the decision.”
They added: “While it is too early to be certain about the outcome of those discussions, the financial impact on the projects in question is limited.”
However, the company warned that the ruling creates less favourable conditions for future development. “The outcome in this case is regrettable, creating less favourable conditions for the development of critical infrastructure projects such as offshore wind.”
Orsted said it would assess the broader impact of the ruling and urged the Government to revisit tax legislation affecting the sector.
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