Land remediation in the construction sector and the financial benefits
Land Remediation Relief Scheme for the Construction Sector
The Land Remediation Relief (LRR) scheme is a significant initiative designed to encourage the remediation of contaminated land within the construction sector. This scheme offers valuable financial benefits to companies undertaking this vital work by allowing them to claim tax relief on qualifying expenditures. Understanding the aspects of land remediation that qualify for this relief and the financial advantages it provides can be critical for construction businesses.
Eligible Aspects of Land Remediation
To qualify for the Land Remediation Relief, certain criteria must be met regarding the activities undertaken. Eligible remediation activities include:
Removing Contamination: This involves activities aimed at cleaning up the land, such as excavating contaminated soil and disposing of it safely.
Treating Contamination: Techniques employed to treat contaminated land, such as chemical treatments, bioremediation, or other processes aimed at neutralising hazardous substances, are also eligible.
Restoration and Reclamation: Efforts to restore land to a safe and usable condition, which may involve the reinstatement of soil or other materials, qualify under the relief scheme.
Environmental Assessments: Costs incurred for environmental assessments associated with remediation efforts can be claimed.
Supportive Infrastructure Development: Infrastructure improvements necessary for effective land remediation, such as drainage systems or barriers to contain contaminants, may qualify for tax relief.
Contaminates can include:
Asbestos
Japanese Knotweed
Radon
Arsenic
Removal of structures predating 1998
Some natural occurring substances
(less developed sites)
Financial Benefits
The financial benefits of the Land Remediation Relief scheme can be substantial for construction firms engaged in these activities. Some key points regarding financial relief include:
Tax Relief Percentage: Companies can claim relief of up to 150% on qualifying remediation costs. This means that for every £1 spent on eligible remediation, companies can reduce their taxable profits by £1.50.
Claiming Process: The relief is applied through the corporation tax return, allowing eligible companies to reflect their remediation expenses in their financial statements and realise savings on their tax liabilities.
Encouragement of Sustainable Practices: By incentivising the remediation of contaminated land, the scheme supports sustainable development practices and contributes to environmental restoration efforts.
Improved Project Viability: The financial relief associated with remediation can enhance the overall viability of construction projects, making previously unsuitable land more feasible for development.
By facilitating the remediation of contaminated sites, the Land Remediation Relief scheme not only alleviates the financial burden on construction firms but also promotes broader environmental goals. Companies in the construction sector should assess their projects to identify any qualifying expenditure and take advantage of the benefits the LRR scheme has to offer.
Contact Recoup Capital on 0800 3277514 to find out more or to request case studies and real life examples.