Land Remediation Relief’s Days appear Numbered
The Office of Tax Simplification has recommended some major structural reforms of the UK tax system in its reports on tax reliefs and small business taxation.
These include proposals for sweeping changes such as the alignment of income tax and national insurance and the abolition or suspension of the IR35 regime.
Simplification brings with it a cost – inevitably there will be some losers. The report recommends abolishing 47 tax reliefs. Whilst many of these are trivial in nature, some give sizeable cash benefits such as land remediation relief, a tax relief for companies which acquire contaminated land or buildings for proposed use in their trade. LRR gives companies a tax super-deduction (or a cash payment for loss makers) for the cost of cleaning up the land of contaminants such as oil spillages and asbestos, and also for the removal of Japanese knotweed. Any companies which have acquired contaminated land need to keep an eye on the Budget to see whether the Chancellor proposes abolishing this relief. If he does, the relief is unlikely to come to an end until Spring 2012 at the earliest, so there may be time to accelerate qualifying expenditure to take advantage of the relief should it disappear.
For more information please contact Rosemary Blundell.