SSE has welcomed a Supreme Court ruling in favour of the company in a long running legal case relating to the Glendoe Hydro Electric Station.
SSE claimed tax allowances on capital expenditure when constructing the hydro-electric power station at Glendoe, Fort Angus, in Scotland. Capital allowances can be deducted from profits when calculating corporation tax.
His Majesty’s Revenue and Customs (HMRC) commissioners had disputed allowances claimed by SSE from 2006-2012 because some assets did not count as allowable expenditure under the Capital Allowances Act 2021.
The dispute was previously heard by the First-tier Tribunal, Upper Tribunal, and the Court of Appeal, before an appeal to the Supreme Court by HMRC. HMRC claimed items constructed for the collection and transmission of water in the hydro-electric plant constituted a ‘tunnel’ or ‘aqueduct’ and therefore did not qualify for capital allowances.
The Supreme Court has dismissed the final appeal, “holding that the disputed items are neither a “tunnel” nor an “aqueduct” within the meaning of those words as used in section 22 List B of Chapter 3, Part 2 of the Act,” according to SSE.
SSE will receive tax relief on around £200 million of expenditure on Glencoe over a 50 year period against the overall taxable profits of the group.