The Supreme Court in Orsted v HMRC [UKSC 12] ruled that pre-construction environmental studies do not qualify for capital allowances. The Court established a narrow "close connection" test, holding that expenditure must be directly "on" the plant rather than merely "in connection with" it. Studies providing advice on how to choose or design plant are considered too remote and fall "well outside the limiting curve" of qualifying costs.

The Tribunal refused the application, concluding that while the underlying tax dispute involving £2 billion in Research and Development (R&D) allowances for Hinkley Point C is undeniably complex, the specific appeal against the information notice did not meet the necessary threshold requirements.

Today's capital allowances Budget changes might sound like a giveaway with a new 40% First-Year Allowances (FYA) for all businesses (with extensions for leasing) but that 18% to 14% Writing Down Allowance (WDA) reduction for existing 'main rate' plant or machinery (P&M) means that overall HM Treasury is hoping to raise an extra £1bn to £1.5bn annually from 2026/27.