You may have already claimed Capital Allowances tax relief, but have you considered everything possible?
Land Remediation Relief...Get cash back into your Business
12 May 2020
In these unusual times, it is more important than ever to unlock the potential cash and tax relief your business may be entitled to, and perhaps the current turmoil in the economy provides an ideal opportunity to take stock and evaluate whether your business is missing out on valuable tax breaks, which could result in a tax rebate and reduced tax liabilities in the future.
Today we are taking a look at Land Remediation Relief for businesses that have been involved in the remediation, refurbishment or development of blighted land and existing buildings.
What is Land Remediation Relief?
Land Remediation Relief (LRR) is a valuable tax relief which is claimable by any company subject to corporation tax. The relief is intended to promote the remediation and development of blighted land and buildings and covers expenditure on specific activities. LRR’s available to property owners, investors and developers, at the following rates on qualifying expenditure:
- Owner, occupier, or investor rate – 150% (uplifted value)
- Developer rate – 50%
- For loss making companies, the relief comes in the form of a tax credit – 16%
The time limit for retrospective claims is up to a maximum of expenditure incurred on LRR qualifying activities in the past 3 years.
What Qualifies for LRR?
Land Remediation Relief qualifying activities can include some of the following:
- Removal of asbestos from buildings.
- Breaking-out buried structures and old foundations.
- Treatment of Japanese Knot-weed.
- Treatment of naturally occurring contaminants including radon and arsenic.
Claims can be made on developments, regeneration projects, fit-outs, refurbishments and any other related project. Whilst generally focused at businesses in the construction sector, it could just as easily apply to any business that has carried out any of these activities on a one-off basis, for example on their office or warehouse, over the past few years.
Client Case Study
We worked alongside a well-established regional house builder to identify 8 projects they’d developed over the past couple of years. They had incurred expenditure on LRR qualifying activities including breaking out old foundations and buried structures, asbestos removal and radon management solutions.
Reviewing the data, we calculated direct expenditure, sub-contractors charges and supplemental costs incurred in reviewing, procuring and managing the remedial works to prepare the claim.
The project delivered a cash tax rebate in excess of £30,000 and we’ll be working closely with them going forward to record future qualifying expenditure for next year’s claim.
Could this be you?
Land Remediation Relief could be a really valuable way to get cash back into your business. Here at Fortus Business Advisors & Accountants, we have an experienced property services team that can help you unlock the benefits that your business may be entitled to.