Japanese knotweed and Land Remediation Relief
What is LRR?
LRR is a tax relief against Corporation Tax. Originally Land Remediation Relief was introduced by the government in 2001 designed to encourage the development of brownfield sites to get them back into productive use after being contaminated.
In 2009, the incentive was extended to help encourage the redevelopment of long-term derelict land. The main goal being to clean up and make safe land that had been polluted due to activities such as mining, quarrying and property construction.
Companies in the UK can claim for LRR retrospectively, up to 4 years for developers and 2 years for investors,
Why is LRR so important?
Today, there are fewer greenfield sites available for development due to increased planning restrictions and reduced site availability, so developers are increasingly having to consider the potentially more challenging brownfield sites; many of which might have contamination and/or dereliction issues. But regeneration and development of these sites comes at a cost, which the government can assist with through application or LRR.
Sadly, too many companies are either unaware of this vital tax relief or view it as additional paperwork that is not worthwhile. Plus, many firms’ accountants simply do not know enough about it in order to either recommend or process a tax claim.
Common examples of qualifying contamination and measures to remove or mitigate the risks include:
- Asbestos e.g. roofing panels – complete removal or capping / encapsulating qualifies
- Sulphate contamination in soil and concrete
- Hydrocarbon contamination e.g. fuels, oils etc. or dealing with disused tanks
- Any pollution from previous industrial activity e.g. heavy metal contaminants from industrial processes
- Ground / landfill gases – any protection measures e.g. membranes / ventilation systems required in buildings or foundations
- Japanese knotweed infestation
- Radon protection measures
- Arsenic contaminants found in soils
- Removal of redundant utility services and concrete foundations on sites or part of sites derelict since April 1998
Don’t miss out!
LRR is well worth investigating by any UK company undertaking regeneration projects involving remediation of contaminated land, or long-term derelict sites being brought back into economic use – as the financial benefits can be significant, as this example shows:
- Client incurred £1.3m on a development, including on ground works.
- The accountant didn’t identify any LRR however when the main contractor information was reviewed it showed the client had undertaken remediation works.
- LRR identified: c.£330k and LRR tax credit of c.£79k will be claimed by the company.
Helping you to Get Specialist advice
Japanese Knotweed Ltd has partnered with a leading UK consultancy specialising in analysing expenditure incurred on the remediation of acquired land and buildings and advising on costs that can be reclaimed.