What is Land Remediation Relief?

LRR was introduced in 2001 and expanded in 2009 to encourage the regeneration of brownfield sites across the UK. It allows companies subject to corporation tax to claim an enhanced deduction of 150% on qualifying expenditure incurred in cleaning up land that was acquired in a contaminated or derelict state.

If your company is loss-making, you may be eligible for a payable credit of 16% of the qualifying costs.

Who Can Claim?

LRR is available to UK companies that:

01 Are subject to corporation tax

02 Hold a major interest in the land (freehold or leasehold with at least seven years unexpired)

03 Acquired the land in a contaminated or derelict condition

04 Were not responsible for the contamination

05 Incurred qualifying remediation expenditure

What Counts as Contaminated or Derelict Land?

Contaminated land is defined as land containing substances that could cause harm to human health, buildings, or the wider environment. Examples include:
– Asbestos
– Japanese knotweed
– Radon
– Heavy metals such as lead or arsenic
– Petroleum and hydrocarbon residues

Derelict land refers to land that has not been in productive use since 1 April 1998, and requires substantial work—such as the removal of buildings or infrastructure—to be brought back into use.

Qualifying Costs

Land Remediation Relief applies to both capital and revenue expenditure, and eligible costs typically include:

Site surveys and environmental assessments
Site surveys and environmental assessments
Remediation of soil, groundwater or buildings
Remediation of soil, groundwater or buildings
Removal of contaminated materials
Removal of contaminated materials
Demolition of derelict structures
Demolition of derelict structures
Professional fees directly related to remediation
Professional fees directly related to remediation
Staff and subcontractor costs for eligible activities
Staff and subcontractor costs for eligible activities

General construction or landscaping costs do not qualify, nor do any expenses where the contamination was caused by the claimant company.

Tax Benefits

The relief offers significant tax benefits:

150% deduction on qualifying expenditure

(i.e. £100,000 of costs becomes a £150,000 tax deduction)

16% cash credit for loss-making companies

(i.e. £100,000 costs can yield a £24,000 cash repayment)

Relief can be claimed up to two years after the end of the accounting period in which the costs were incurred

How to Claim

Claiming LRR involves a number of technical and procedural steps. InnoFund helps clients through the full lifecycle:

01 Site assessment

Verify whether the land meets the contaminated or derelict definitions.

02 Cost identification

Extract and categorise eligible spend from project records.

03 Documentation

Prepare supporting schedules, election statements (for capital spend) and tax return adjustments.

04 Submission & Support

File the claim with HMRC and respond to any queries post-filing.

Start Your Claim Today

If you’ve incurred costs in cleaning up contaminated or derelict land, you could be missing out on substantial tax relief. Let InnoFund help you unlock its full potential. Ready for a complimentary estimate to your benefit?

020 4583 1267
info@innofund.uk