Land Remediation Relief (LRR) remains one of the UK’s most valuable – yet frequently overlooked – tax reliefs available to companies involved in land development.

It offers significant financial benefits for those remediating contaminated or long-derelict sites.

However, the relief comes with a strict time constraint: businesses have just two years from the end of the relevant accounting period in which to submit a claim.

Miss this deadline, and any entitlement to LRR is permanently lost.

If your organisation has undertaken any land remediation activities in the last two financial years, now is the time to consider whether a retrospective claim is appropriate.

What is Land Remediation Relief?

LRR allows companies to claim a tax deduction of 150% of qualifying expenditure incurred in cleaning up land that has been affected by contamination or long-term dereliction.

In some instances, this can result in a corporation tax saving of up to 28.5p for every £1 spent.

For loss-making companies, the relief can also be surrendered for a payable tax credit.

Eligible costs may relate to the removal of:

  • Contaminated soil or groundwater (e.g. hydrocarbons, asbestos, heavy metals)
  • Japanese knotweed, radon or harmful gases (e.g. methane, carbon dioxide)
  • Derelict structures or buried infrastructure that pre-date site acquisition

Both property developers and owner-occupiers may be eligible for the relief, provided the contamination was not caused by the claimant.

The two-year time limit

The most common reason companies miss out on LRR is timing. The claim must be made within two years of the end of the accounting period in which the qualifying expenditure was incurred.

For example, a company with a 31 December 2023 year-end must submit any claim relating to that period by 31 December 2025.

After this date, it is no longer possible to amend the return – and any relief that could have been claimed is forfeited.

Why LRR is overlooked

Many businesses only discover LRR after the window to claim has already closed. This is often due to:

  • Lack of awareness among finance or project teams
  • Misconception that only large-scale contamination qualifies
  • Confusion with other reliefs such as R&D tax credits
  • Insufficient documentation from remediation contractors
  • Staff turnover – those with knowledge of the works may have left the business

What can be claimed?

Qualifying expenditure typically includes:

  • Site investigation and environmental surveys
  • Specialist contractor and remediation costs
  • Disposal of contaminated materials
  • Professional fees directly attributable to the remediation process

It is important to note that general demolition or preparation work does not qualify unless it relates specifically to contaminated or derelict land.

A practical example

We recently supported a client, a regional developer, who acquired a former industrial site.

Following site investigations, significant contamination was identified, including hexavalent chromium, hydrocarbons and asbestos in the made ground.

We worked with their project team to identify qualifying costs totalling over £380,000. The resulting LRR claim generated a tax saving of almost £145,000 – funds which were reinvested into their next development. –

Had they delayed the claim by just a few months, it would have been out of time.

Recommended next steps

If your business has acquired or redeveloped land in the past two years, consider the following:

  1. Review recent developments and capital projects involving land clearance or remediation.
  2. Gather supporting documentation – including environmental reports, contractor invoices and site investigations.
  3. Engage a specialist tax adviser with experience preparing LRR claims, to ensure both eligibility and maximisation of relief.

Conclusion

Land Remediation Relief provides a tangible benefit for companies that invest in regenerating contaminated land. Yet without awareness of the time limit, many eligible businesses miss out.

The two-year deadline is absolute – and for many, it is fast approaching.

If your company has undertaken relevant activities, it is worth reviewing eligibility now. Doing so could result in a substantial refund or tax saving, improving project viability and freeing up capital for future investment.

Our team of tax specialists has extensive experience in identifying, preparing, and submitting successful Land Remediation Relief claims for clients across a range of sectors, including property development, manufacturing, and logistics.

Whether you are seeking a retrospective claim or want to integrate LRR planning into future projects, we offer a comprehensive, tailored service designed to maximise your benefit with minimal disruption to your day-to-day operations.

Contact us today for a no-obligation review of your recent projects and advice on potential eligibility.