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Land Remediation Relief is a tax incentive provided by the UK government in order to encourage to clean up and development of contaminated or derelict land. As a result, this allows companies to claim tax relief on expenditures that incurred during the remediation of the contaminated sites.
Moreover, the main objective of Land Remediation Relief is to reduce the financial burden associated with land remediation. By providing this relief, the government promotes the redevelopment of the derelict land for productive use, such as housing, commercial projects, or even industrial developments, for instance!
In order to be deemed eligible for Land Remediation Relief;
Above all, the relief is available to both corporate entities and individuals continuing a trade or property business!
Land Remediation Relief (LRR) can have a positive impact on individuals and businesses engaged in land remediation activities. Here are some ways that LRR can benefit you and your business:
Corporation Tax Reduction: Therefore, if you’re a company engaged in the remediation of contaminated land, you may be eligible for LRR. The relief allows you to claim a deduction of 150% off the qualifying remediation costs incurred. This means that for every £100 of qualifying expenditure, you can deduct an additional £50, resulting in a total deduction of £150 from your taxable profits.
Losses: For instance, if your company incurs losses from the remediation activities that qualify for LRR, you have the option to carry these losses back against profits of the previous 12 months. This can generate a tax refund or reduce tax liabilities from prior periods.
Enhanced Capital Allowances (ECAs): In addition, certain energy-efficient plant and machinery used for land remediation may also qualify for ECAs. This allows you to claim a 100% first-year capital allowance on qualifying expenditure, providing a significant tax benefit by accelerating the depreciation of these assets.
Attracting Investment: The availability of LRR can make land remediation projects more financially viable and attractive to potential investors. In other words, the tax relief can help reduce the overall cost of the project and potentially increase the return on investment.
This is a short meeting either by phone or in person, to confirm if you are eligible for this government tax incentive.
This is to confirm our T&Cs, NDA, and Data Protection Compliance, and is a simple form signed electronically.
This is where you will sit down with a specialist tax analyst to determine if your company qualifies for Land remediation Relief, and explain the administration process that Counting King will conduct on your behalf.
We request copies of certain financial documentation such as your accounts, payroll summaries, tax computations, and invoices relating to works carried out (if necessary) to calculate what benefit you will receive.
This is where we send everything to you for approval and make sure you are happy with the content included, which will be sent to HMRC.
This is where your claim and all of the supporting evidence we have produced is submitted to HMRC for processing.
Once HMRC has processed your claim you will receive the benefit as discussed with your Tax Analyst at Counting King.
Find Out How Much You Can Claim With Our FREE Land Remediation Relief (LRR) Calculator. You can even get the calculation emailed to you for future use.
Land Remediation Relief is administered by HMRC! Here’s an overview of their process for claiming Land Remediation Relief:
Qualifying Conditions: Firstly, ensure that your land remediation activities meet the qualifying conditions for LRR. The key condition is that the land must be in a contaminated or derelict state and requires remediation to bring it back to a usable condition.
Calculate Eligible Expenditure: Secondly, identify the qualifying expenditure that can be claimed under LRR. This includes costs directly related to the land remediation, such as site investigation, cleaning up contamination, removing hazardous materials, and restoring the land.
Claim Preparation: Thirdly, prepare the necessary documentation to support your claim. This may include invoices, contracts, site reports, and other relevant records that demonstrate the qualifying expenditure and the remediation activities carried out.
Complete Corporation Tax Return: In addition, Include the LRR claim in your company’s Corporation Tax Return. Provide the relevant details of the qualifying expenditure, the additional 50% deduction, and the resulting reduction in taxable profits.
Submit the Claim: File your Corporation Tax Return, including the LRR claim, to HM Revenue and Customs (HMRC) within the specified deadlines. Ensure that you follow the correct procedures for submission.
Assessment: In conclusion, HMRC will review your claim and supporting documentation. They may seek additional information or clarification if required. Once the assessment is complete, HMRC will determine the amount of LRR you are eligible to receive.
Tax Relief Application: Above all, if approved, the LRR amount will be used to reduce your corporation tax liability. Above all, it can result in a reduction in the amount of tax your company owes or generate a tax refund if you have overpaid your taxes.
Land Remediation Relief (LRR) offers many benefits to individuals and businesses associated with land remediation activities. These benefits include:
Tax Deductions: Firstly, LRR provides a deduction of 150% off the qualifying expenditure incurred in remediating contaminated land. This means that for every £100 of qualifying costs, an additional £50 can be deducted, resulting in a total deduction of £150. This reduces taxable profits and can significantly lower your corporation tax liability.
Increased After-Tax Profits: Secondly, by reducing your corporation tax liability through LRR, you can increase your after-tax profits. This provides businesses with more financial resources that can be reinvested, used for expansion, or distributed to shareholders.
Loss Relief: Thirdly, if your company incurs losses from land remediation activities that qualify for LRR, you have the option to carry these losses back against profits of the previous 12 months. This can generate a tax refund or reduce tax liabilities from prior periods, improving cash flow.
Enhanced Capital Allowances (ECAs): In addition, certain energy-efficient plant and machinery used for land remediation may qualify for ECAs. ECAs allow for a 100% first-year capital allowance on qualifying expenditure. This means you can deduct the full cost of these assets from your taxable profits, providing further tax savings.
Project Viability and Investment Attraction: LRR can make land remediation projects more financially viable and attractive to potential investors. The tax relief reduces the overall cost of the project, increases potential returns on investment, and encourages the remediation of contaminated or derelict land.
Environmental Benefits: LRR aims to encourage the remediation and reuse of contaminated land, leading to environmental improvements. By reclaiming and revitalizing such sites, LRR contributes to sustainable development, promotes environmental protection, and helps restore land for productive use.
Contact us today to find out if your project is eligible for Land Remediation Relief