About the Scheme
The UK government allows businesses who are subject to Corporation Tax in the UK to claim land remediation relief of up to 150% on qualifying expenditure they incur, when they remediate land (including buildings) they acquire or lease in a contaminated or derelict state explained below:Contaminated Land – Land (and building) is in a contaminated state if there is something in, on or under it which causes “relevant harm”, or there is a serious possibility that “relevant harm” will be caused. The contamination must be the result of an industrial activity unless the contaminant is arsenic, radon, or Japanese knotweed – these can be present naturally.Derelict Land – This is land (and building) which is out of productive use, and incapable of being brought back into productive use unless buildings or structures on it are removed. Dereliction must be in existence on or before 1 April 1998. Relevant expenditure includes removal of structures such as relating to foundations and below ground redundant services.
What are the benefits
LRR is a form of tax relief that provides up to 150% tax deduction to companies in order to incentivise them to remediate dereliction or contamination such as Japanese knotweed, asbestos, radon, arsenic. The remediation works, may form part of new developments or refurbishment of existing properties. This means that companies can deduct the value of the allowances from their profit, whilst calculating their tax liability. Other key points are as follows:
Key benefits
- For developers who treat their expenditure as revenue cost already deductible for tax purposes, they can claim 50% uplift instead of 150%.
- The 150% tax deduction is equivalent to 28.5% tax saving benefit (28.5p for every £1 spent) based on the current 19% Corporation Tax rate.
- The 50% uplift tax deduction is equivalent to 9.5% tax saving benefit (9.5p for every £1 spent) based on the current 19% Corporation Tax rate.
- As opposed to a tax reduction, the relief can take the form of a 24% tax credit (cash receipt) to the company if they are loss making.
How we can help
Our land remediation relief team of qualified specialists with diverse experience and multidisciplinary construction, engineering, surveying, accounting and tax advisory skills, leverage their expertise to maximise cash saving benefits for businesses who incur land (and buildings) remediation expenditure. Throughout the remediation expenditure review process, we work closely with companies to identify all qualifying expenditure. We however work in such a way that minimises their involvement in the review process, such that they can focus on their core business activities and avoid it being disrupted.
Incurred or planning to incur land (and building) remediation cost for your business?
Do you have any planned or recent new development or property refurbishment works where you encountered and remediated dereliction or contamination in land and buildings? We can provide an end-to-end consultancy service, aimed at identifying qualifying expenditure and corresponding valuable tax relief. This includes from technical and financial discovery through to preparing and issuing the claim report.
Why work with The Consulting Company?
We are an international consulting firm which helps businesses leverage financial incentives to accelerate their growth and achieve long lasting performance.
With a multifaceted skillset comprising of construction, engineering, surveying, accounting and tax advisory, our dedicated land remediation team is uniquely placed to apply their technical expertise and experience in identifying and maximising qualifying remediation expenditure. This subsequently leads to valuable cash tax savings and improved business cash flow.
Our information gathering processes ensure that all possible qualifying costs are included. We always keep compliance front of mind and have been delivering optimal services for over 24 years. This provides our clients with the peace of mind that they will receive the maximum financial benefit without unnecessary risks.