If you’re wondering how to claim Land Remediation Relief, we’re here to help. Land Remediation Relief was first introduced under the Finance Act 2001 to encourage the cleanup and redevelopment of contaminated land, allowing businesses to claim Corporation Tax relief on qualifying costs.
If you believe your project may be eligible for the scheme, you will need to make a claim within a set period, depending on whether you’re incurring capital or revenue costs.
To find out if you’re eligible, how to claim Land Remediation Relief, and common mistakes to avoid, continue reading.
Who Can Claim Land Remediation Relief?
You will usually be able to claim Land Remediation Relief if:
- You’re a UK-registered company subject to Corporation Tax
- You own the land or hold a lease with at least seven years remaining
- The land must have been acquired in a contaminated or derelict state
- Your company was not responsible for causing the contamination
- The costs must qualify as remediation expenditure
Unfortunately, you cannot claim if you’re a sole trader or a partnership, your company caused the contamination, or if the costs don’t qualify as remediation expenditure.
How Long Do You Have to Claim Land Remediation Relief?
Generally, you have up to two years after the end of the accounting period when the expenditure was incurred to claim Land Remediation Relief.
However, the time limit can vary depending on the type of costs you’re claiming for:
- Capital costs (owner-occupiers and investors): Claim within 2 years of the end of the accounting period.
- Revenue costs (developers and housebuilders): Claim up to 4 years from the end of the accounting period in which the property is sold.
If you require additional information about making a claim, check the HMRC Corporate Intangibles Research and Development Manual, section CIRD60060 (Land Remediation Relief: claims).
How Much Land Remediation Relief Can You Claim?
How much Land Remediation Relief you can claim depends on whether:
- Your company is profit-making: Apply a 150% enhanced deduction to your qualifying expenditure.
- Your company is loss-making: claim a 16% cash tax credit on your qualifying expenditure if you’re a property developer, or 24% cash tax credit if you’re an owner-occupier or investor.
How to Claim Land Remediation Relief: Step-by-Step
Follow our simple steps on how to claim Land Remediation Relief.
Step 1: Confirm Eligibility
The initial stage of claiming Land Remediation Relief involves checking that your business is UK-registered, subject to Corporation Tax, holds a major interest in the land (freehold or a lease of at least seven years), acquired the land in a contaminated or derelict state, didn’t cause the contamination, and ensured the costs qualify as remediation expenditure.
Step 2: Identify and Document Qualifying Expenditure
You must identify and document qualifying expenditure, such as:
- Employee salaries, National Insurance (NI), and pensions for staff engaged in remediation work
- Contamination, including asbestos, heavy metals, hydrocarbons, Japanese knotweed, and radon
- Materials required to complete the remediation process, like chemical agents, specialist containers, and protective liners
- Fees for specialist services, site investigations, and surveys
- Additional costs, such as payments to third-party contractors, and handling fees for removing hazardous waste
Step 3: Calculate Relief
You must calculate the relief you’ll receive depending on whether your company is profit-making or loss-making.
Let’s take a look at a relief calcualtion example based on £100,000 of qualifying expenditure:
If you’re a profit-making company, you can reduce your taxable profits by £150,000 (the original £100,000 plus an extra £50,000 enhanced relief). If you’re a loss-making property developer, you can claim £16,000 as a cash refund from HMRC (16% of £100,000). If you’re a loss-making owner-occupier or investor, it will increase to £24,000 (24% of £100,000).
Step 4: Submit via Corporation Tax Return
There’s no specific application required to claim Land Remediation Relief — simply include your claim in your CT600 (Corporation Tax return) for the relevant accounting period.
Step 5: Amend a Previous Return if Needed
If you missed the opportunity to claim Land Remediation Relief in an earlier period, you can amend that return within a time limit of two years for capital costs, or four years for revenue costs.
Mistakes to Avoid When Claiming Land Remediation Relief
If you claim Land Remediation Relief, avoid these common mistakes to ensure you receive the full tax benefit available:
✖️Don’t include non-qualifying development costs
✖️Don’t claim if you or a connected party caused the contamination
✖️Don’t misunderstand what counts as contaminated land
✖️Don’t fail to keep adequate evidence to support your claim
✖️Don’t claim if costs were funded by grants or other schemes
✖️Don’t miss strict claim deadlines
✖️Don’t make deliberate inaccuracies in your claim, or you may receive a penalty
Claim Land Remediation Relief With Us
At LJS Accounting Services, we assist clients across the UK to claim Land Remediation Relief. Whether you’re unsure how to claim Land Remediation Relief or simply want us to manage the full process on your behalf, we can help. Our experienced team are here to support you in making a claim, ensuring eligibility, and staying compliant.
Get in touch today and let us handle your Land Remediation Relief claim from start to finish.
FAQs
How long does it take to make a Land Remediation Relief claim?
Making a Land Remediation Relief claim via your CT600 doesn’t take too long. However, once submitted, HMRC processing times vary. Straightforward claims are often processed within a few weeks, but more complex cases can take longer.
What if I received a subsidy or grant for my remediation work?
If the remediation work is fully covered by a subsidy or grant, Land Remediation Relief will not be available. However, if you only received a partial subsidy or grant, Land Remediation Relief will be available once you remove that amount from the qualifying expenditure.
Do I need to remediate the land or just assess contamination to make a claim?
You must carry out the actual remediation of the land to be able to make a claim.
Do I legally need an accountant to make my claim?
No, you don’t legally need an accountant to make a claim, but it’s highly advised. Accountants can manage the process on your behalf, identify qualifying expenses, calculate tax benefits, secure cash credits, and ensure compliance throughout.
