Land

Remediation

Tax Relief

Property & Land Tax Relief Advisory - Land Remediation Tax Relief:

Land Remediation Tax Relief (LRTR) is a UK government incentive designed to encourage businesses to redevelop and improve previously contaminated or derelict land. The relief allows companies to claim tax deductions for the costs associated with cleaning up land or buildings that are in a poor state or contain contaminants, helping to make these sites viable for new development and use.

Key Features of Land Remediation Tax Relief

  1. Enhanced Tax Deduction: Companies can claim up to 150% of their qualifying land remediation expenses against their taxable profits. This means that for every £100 spent on eligible remediation activities, a company can reduce its taxable profits by £150.

  2. Cash Tax Credit for Loss-Making Companies: For companies that are not making a profit and therefore have no taxable profits to offset, LRTR can provide a cash tax credit. This credit is equivalent to 16% of the qualifying expenditure, providing valuable cash flow support.

  3. Qualifying Conditions:

    • Ownership: The relief is available to companies that either own or lease the land or buildings being remediated.

    • Contamination: The land or buildings must be in a contaminated state, meaning that there is a presence of hazardous substances or other materials that make the site unsuitable for use without cleanup.

    • Qualifying Expenditure: Costs associated with the remediation activities, such as the removal of contaminants, the treatment of hazardous materials, and the stabilisation of land, are eligible for relief. These activities must be aimed at making the land or buildings safe for use or development.

  4. Eligible Contaminants: The scheme covers a wide range of contaminants, including:

    • Hazardous materials such as asbestos, lead, or arsenic,

    • Polluted groundwater or soil,

    • Derelict structures that require removal or stabilisation,

    • Japanese knotweed and other invasive plant species,

    • The remediation of land to reduce naturally occurring contaminants, such as radon gases.

Our Approach:

  • 1. Initial Consultation & Feasibility Assessment

    Understanding Your Project: We begin by discussing your project in detail to understand the nature of the remediation work and the specific issues you are addressing.

    Eligibility Check: Our team conducts an initial assessment to determine if your project meets the eligibility criteria for LRTR. This includes evaluating the ownership of the land or buildings, the presence of contaminants, and the type of remediation activities undertaken.

  • 2. Financial & Property Documentation Review

    Review of Project Documentation: Our team will request and review all relevant project documentation, including environmental reports, planning permissions, remediation plans, and cost records. This review helps us identify qualifying expenditures and activities.

  • 3. Identification & Classification of Qualifying Expenditures

    Detailed Analysis: We conduct a detailed analysis of all remediation-related expenditures, categorising them into eligible and ineligible costs. This includes staff costs, subcontractor fees, materials, and other expenses directly related to the cleanup.

    Cost Allocation: For projects involving both qualifying and non-qualifying activities, we work with you to accurately allocate costs to ensure maximum benefit from the tax relief.

  • 4. Preparation of the LRTR Claim

    Drafting the Claim: Our team will prepare the comprehensive Land Remediation Tax relief report, detailing the nature of the remediation work undertaken, the contaminants addressed, and the qualifying expenditures incurred. We ensure that all necessary supporting documentation is included.

    Compliance and Accuracy Check: We conduct a thorough review of the claim to ensure compliance with the latest HMRC guidelines and accuracy in the presentation of the information.

  • 5. Client Review & Approval

    Client Presentation: We present the draft LRTR claim to you for review, explaining the details and the basis for the qualifying expenditures. We address any questions or concerns you may have.

    Approval Process: Once you are satisfied with the claim, we seek your formal approval before proceeding with submission.

  • 6. Submission & Ongoing Support

    Claim Submission: We can either file the claim on the company’s behalf or liaise with the company’s accountants/ tax advisors as necessary to assist them with submission on the company’s behalf.

    Monitoring and Updates: We monitor the progress of the claim and provide you with regular updates. In the event of any queries or additional information requests from HMRC, we assist in providing prompt and accurate responses.

    Post-Submission Support: Our support doesn't end with the submission. We remain available to assist you with any follow-up actions or future land remediation projects.

  • 7. Continuous Improvement & Strategy Planning

    Feedback and Analysis: After the claim process is completed, we analyse the outcomes and gather feedback to identify areas for improvement in future claims.

    Strategic Planning: We work with you to develop a long-term strategy for managing land remediation projects and maximising tax relief benefits in the future.