Understanding Land Remediation Relief

If your company is based in the UK and has been working on remediating a piece of land over the last couple of years, it would be worth looking into the Land Remediation Relief scheme. This incentive provides a significant financial boost for businesses transforming contaminated or derelict land into valuable assets, helping to alleviate financial burdens while promoting environmental sustainability.

In this blog post, we’ll guide you through the key criteria to determine if your company is eligible for LRR.

What Types of Land Qualify for LRR?

For land to qualify for LRR, it needs to meet one of these two conditions:

Contaminated Land: This refers to land tainted by harmful or natural substances or elements that make it unusable.

Derelict Land: This term refers to lands that are in a poor condition and need remediation before they can be used.

Types of Contamination

LRR covers a wide range of contamination sources, which can be split into two categories: natural and industrial.

Natural Contamination:

• Japanese knotweed
• Radon
• Arsenic

Industrial Contamination:

• Petrochemicals (a common pollutant)
• Any substances that make the land unfit for responsible use

Who Can Claim Land Remediation Relief?

While the land's condition is crucial, eligibility for LRR comes down to one important requirement:

Ownership: The company claiming LRR needs to own the land being remediated. It is not about directly using or occupying the land; what truly matters is that the company has taken on the financial burden for remediation. Another crucial condition is that the company must be unrelated to the polluter. If a company is connected to the contamination of the land, it will be ineligible to claim Land Remediation Relief (LRR).

Key Features and Benefits of LRR

• LRR Uplift: LRR offers a 50% uplift on qualifying expenses, which helps lessen the financial pressure of remediation projects.
• Restrictions: Unlike the R&D tax relief scheme, there are no caps on subcontractor costs or PAYE restrictions.
• Benefits: For companies making a profit, the relief roughly amounts to a benefit of 9.5% of qualifying expenses (based on a 19% tax rate). For those operating at a loss, a tax credit of 16% applies.

Conclusion

The Land Remediation Relief scheme presents a great opportunity for companies aiming to recover costs while playing a part in restoring contaminated or derelict land. If your business owns land that fits these criteria, then you could benefit from significant tax savings or cash back.

If you are a subcontractor who is usually hired for land remediation purposes, this scheme might also be interesting for you for other reasons. You may be able to introduce the property owners to the LLR, benefitting both companies in the long run.

If you think your company or companies you work with could be eligible, feel free to reach out to Gray Burke-Stowe to learn more about how Grantica can help you.?