Land Remediation Relief (LRR) offers a big incentive to businesses and land owners that bring contaminated and derelict land back to productive use.
Introduced in 2001 and redesigned in 2009, LRR offers a relief on Corporation Tax equal to 150% of the qualifying expenditure that was incurred in the cleaning up of acquired land.
Land is classed as contaminated when:
It is causing relevant harm
There is a serious possibility it could cause relevant harm
It is causing, or there is a possibility it could cause, significant pollution in ground water, streams, rivers or coastal waters
‘Relevant harm’ refers to contamination that could have significant adverse impact on humans or animals, or cause damage to buildings, which has a real impact on the way they can be used.
Land contamination must be present as a result of industrial activity, such as:
Mining or quarrying
Supply of gas, electric or water
However, the site itself doesn’t necessarily need to have been used for industrial activity. For example, removal or containment of asbestos from a former shop or restaurant can be claimed for if the issue was present due to the construction of the physical building.
LRR is only available if remedial work is undertaken and claims can be made up to two years after the company year-end date.
Costs to claim
Staffing costs such as site assessments, which are based on a percentage salary cost
Materials used that are over and above standard issued items because of the contamination present
Sub-contractor costs and professional fees e.g. additional site surveys to establish levels of contamination or increased sub-contractor costs who are working whilst site remains contaminated
Businesses or land owners are eligible to claim any expenditure that has increased due to site contamination or has been borne by this issue. For example, appointing contractors to contain asbestos, higher security perimeter fencing to prevent people from entering the site, additional waste costs if contaminated matter can’t go to landfill as well as additional desk studies over and above the original site search studies. Costs can also be claimed for clearing any land adjoining the site or controlled waters.
Expert advisors from Champion Accountants can help identify relevant qualifying expenditure and assist with the provision of a supporting report to substantiate your claim to HMRC. To see what LRR you could claim contact David Herd at David.Herd@championgroup.co.uk or on 0161 703 2500