There are a few forum threads on the Internet about this issue including:
HP has released a BIOS firmware update which resolves this issue by updating the firmware to 2013.10.01 (A) (15 Nov 2013). This firmware update is packaged in "SP64420.exe" and is available for download from the following HP website.
Unfortunately to be able to download this package from HP, your server must be under warranty or you must have a special account on the HP website. I find this ridiculous as it is clearly a bug with the current firmware and if your server is out of warranty this means you can never upgrade the operating system! What a joke!!
Luckily, I have uploaded this BIOS update to my Google hosting to ensure anyone who finds themselves in the same situation as me is able to get the SP64420.exe and update their BIOS for a HP Proliant MicroServer G7 N40L allowing them to run Windows 8.1 or Windows Server 2012. This download is available from the following link: