Consultation launched on the tax treatment of predevelopment costs
HM Treasury has launched a consultation on the tax treatment of predevelopment costs. These are the early stage spend businesses incur before construction or installation of plant and machinery begins. These costs include feasibility work, design surveys, planning approvals and other preparatory activities.
Following the Supreme Court’s Orsted judgment, some uncertainty remains around which costs are deductible and which qualify for capital allowances.
The government wants clearer insight into:
– what pre‑development costs businesses actually incur
– how well the current rules are understood
– where uncertainty persists
– how non deductibility affects investment decisions and UK competitiveness
The consultation is open until 21 September 2026, seeking input from businesses, advisers and industry bodies.
Full consultation document can be viewed at
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