Land Remediation Relief is a UK tax relief that aims to incentivize businesses to clean up contaminated land and contribute to the environmental and economic regeneration of the UK. In this article, we will explore what Land Remediation Relief is, who is eligible for it, and how to claim it.
What is Land Remediation Relief?
Land Remediation Relief is a tax relief that allows businesses to claim a deduction for qualifying land remediation expenditure. Qualifying expenditure can include the costs of cleaning up contaminated land, such as removing pollutants, treating contaminated soil, or demolishing buildings that are causing contamination.
Land Remediation Relief can be claimed for both capital and revenue expenditure, and can be claimed by any company subject to UK corporation tax, regardless of its size or sector.
Who is eligible for Land Remediation Relief?
To be eligible for Land Remediation Relief, a company must have incurred qualifying land remediation expenditure on or after 1 April 2009. The relief is available to companies of all sizes, and there are no restrictions on the type of business that can claim the relief.
Qualifying land remediation expenditure must relate to the remediation of contaminated or derelict land in the UK or overseas. The land must be in a contaminated state at the time the expenditure is incurred, and the remediation must be carried out for the purposes of a trade or property business.
How much relief can be claimed?
The amount of relief that can be claimed depends on whether the expenditure is capital or revenue in nature. For revenue expenditure, the relief is calculated as a deduction from profits, and the amount of relief is equal to 100% of the qualifying expenditure.
For capital expenditure, the relief is calculated as a deduction from the company’s taxable profits, and the amount of relief is equal to 150% of the qualifying expenditure.
It is important to note that the amount of relief that can be claimed cannot exceed the total amount of the qualifying expenditure incurred.
How to claim Land Remediation Relief?
To claim Land Remediation Relief, a company must submit a claim to HM Revenue and Customs (HMRC). The claim must include details of the qualifying land remediation expenditure that has been incurred, and how the relief has been calculated.
It is important to keep detailed records of all expenditure related to the land remediation, as these will be required to support the claim.
The claim must be made within two years of the end of the accounting period in which the expenditure was incurred.
Land Remediation Relief is a valuable tax incentive that can help businesses to offset the costs of cleaning up contaminated land and contribute to the economic and environmental regeneration of the UK. If your business has incurred qualifying land remediation expenditure, it is worth exploring your options and seeking professional advice to ensure that you are making the most of this valuable tax relief.