If your company owns or redevelops land that’s seen better days — maybe it’s contaminated or previously used for industrial purposes — you could be sitting on a hidden tax break. It’s called Land Remediation Relief (LRR), and it could shave a big chunk off your corporation tax bill.
Yet many businesses either don’t know it exists or aren’t sure how to claim it. Let’s break it down.
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What Is Land Remediation Relief?
Land Remediation Relief is a UK tax incentive to encourage companies to clean up contaminated or derelict land. It’s HMRC’s way of giving businesses a financial nudge to invest in environmental improvement, especially when dealing with brownfield sites.
Under the scheme, companies can claim a deduction of 100% of qualifying costs plus an additional 50% uplift. That means if your business spends £100,000 cleaning up land, you could deduct £150,000 from your taxable profits. That’s a pretty generous incentive, and in some cases, you can even claim a cash credit if your company is making a loss.
Who Can Claim Land Remediation Relief?
To qualify, you need to be a UK limited company that pays corporation tax. Individuals, partnerships and LLPs don’t qualify.
The relief is available when you incur costs to clean up land that was in a contaminated state when you acquired it. This might cover:
- Removing asbestos
- Dealing with oil or chemical spills
- Treating Japanese knotweed
- Removing underground tanks or invasive materials
If you’re also tackling long-term dereliction (think abandoned buildings without utilities for years), you may qualify under a separate strand of the relief.
What Counts as Contaminated?
According to HMRC, contamination means the land is in a condition that causes “relevant harm” or poses a “significant possibility” of harm. That could be to human health, property, or the environment. So if you’re dealing with land where you wouldn’t want to build homes or offices without serious remediation work, chances are, it qualifies.
However, you mustn’t be the one who caused the contamination; no cleaning up your own mess and getting a tax break for it.
What Costs Qualify?
Eligible costs typically cover:
- Site investigations and surveys
- Specialist contractor fees
- Materials and staff costs directly related to the clean-up
- Landfill tax and disposal charges
But be careful, the rules are specific. For example, costs must relate solely to land in the UK and cannot include general construction or development expenses. Keep clear records and evidence of what you’ve done and why.
How to Claim the Relief
You claim land remediation relief in your company’s corporation tax return (CT600). Usually, this means submitting detailed computations and supporting evidence of the work carried out. You can also make an amendment to previous returns if you’ve missed a claim, provided it’s within the relevant time limits (generally two years from the end of the accounting period).
It’s a good idea to work with an accountant or tax adviser who understands the technical requirements. A solid claim not only increases your chances of approval but also helps you sleep better at night knowing HMRC won’t come knocking later.
Why It Matters
With construction costs rising and sustainability in sharp focus, LRR can be a win-win. Your company helps regenerate communities and restore neglected land, and gets rewarded at tax time. It’s useful for developers, housing associations or businesses relocating operations to old industrial sites.
Final Thoughts
Land Remediation Relief isn’t only another obscure tax rule but a powerful way to boost your bottom line while doing something good for the environment. So if your business is tackling land clean-up, don’t leave money on the table. Dig into the details and make the claim. Sometimes, cleaning up can really pay off.
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Lois Lane is a professional blogger and a seasoned Content writer for wellhousekeeping.com. With a passion for simplifying complex Home Decor topics, he provides valuable insights to a diverse online audience. With four years of experience, Lois has polished his skills as a professional blogger.
