tax relief news
TAX RELIEFS for contaminated land and R&D How ARCA Members and their clients can benefit
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ost ARCA members routinely work at bringing brownfield sites back into use. But what isn’t always obvious is that much of this work attracts tax reliefs that make it much more profitable to do so. The issue of tax relief has come to the fore lately as companies around the UK focus even harder on defending cash flow and revenues in the face of the economic impact of the coronavirus pandemic. Derelict brownfield sites litter the country but many sit idle far longer than they should because of the costs associated with removing different types of contamination, ranging from asbestos to Japanese Knotweed. However, there is a government incentive scheme that can help, making the prospect of cleaning up contaminated sites — which are often much cheaper — far more profitable. The tax relief in question is Land Remediation Relief. ARCA members stand to benefit greatly from better use of this tax break, but they can also play a major role in helping clients understand what is available to them too.
Remediation of Contaminated Land (RoCL) — the answer to removing asbestos and more When viewing a derelict brownfield site, contamination problems are not likely to be immediately obvious to the untrained eye. They can lie deep in the ground or among the overgrown grass. There are significant costs associated with even beginning to consider regenerating a piece of land like this, with detailed surveys needed to first examine a range of common problems. The good news is that you can claim tax relief on all the costs associated with bringing a piece of derelict brownfield land up to scratch, including the initial surveys. The relief also applies to the subsequent remediation work and removal of contaminants.
Land Remediation Relief — also known as Contaminated Land Tax Relief — allows companies to claim relief of 100% of the cost of this work against their corporation tax bill. An additional 50% can be claimed for qualifying costs associated with cleaning up land acquired from a third party that is in a contaminated state and causing, or has the potential to cause, harm to people and animals, or water pollution. Qualifying activities under this additional relief include: w the removal or treatment of Japanese Knotweed w removal of asbestos w treatment of gasses and chemicals within the land w removal of underground contaminated tanks w and removal of concrete foundations, pillars and bases. If you or a client have carried out work that you think may qualify, you may still be able to benefit. Claims for Land Remediation Relief can be backdated two years, so firms that have been badly affected by the pandemic can return to work done in 2018 and 2019 with a view to boosting their bottom line. But Land Remediation Relief is not the only tax incentive that ARCA members are likely to be able to exploit. Many members will be creating new methods for decontaminating buildings and land, and this work could well qualify as Research & Development.
R&D Tax Credits The Government’s R&D tax credit scheme means any company investing time and money in new products, processes or services that seek to resolve a scientific or technological uncertainty can claim either a reduction in their limited company’s corporation tax bill or a cash lump sum.
The relief is designed to incentivise innovation in all industries and for companies of all sizes. R&D does not need to have been successful to qualify, and claims can be backdated up to two years from the end of the tax year in which the work took place. Examples of past claims in this sector include: w inventing a new method of securing asbestos panels as they were removed from an aircraft hangar where dust and debris was a major consideration w developing a new software platform to coordinate activity and information for a firm in the commercial property sector specialising in fire, water and asbestos (FWA) risk assessments and training w creating a software platform that automatically produces client-friendly reports following asbestos risk assessments and removal.
Cost of claiming Unlike site surveys, it is possible to find out how much your benefit could be from these reliefs without spending any money. Most consultant companies, including Catax, will assist clients on a contingentfee basis so there’s no risk that a company will incur costs if they are not entitled to tax relief. Both R&D tax relief and Land Remediation Relief can make a huge difference to a company’s financial strength. With so much uncertainty hanging over the economy, it’s crucial that firms take advantage of the money they are owed before the time left to claim runs out. If you would like more information about Land Remediation Relief or R&D tax credits, email tax relief specialist Karen McFadden at karen.mcfadden@catax.com.
issue 109 · arca & atac news
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