Land remediation relief (LRR) may be claimed where a company incurs qualifying expenditure on the remediation of contaminated or derelict land. Where a successful claim is made, an additional deduction equal to 50% of the qualifying expenditure is given in calculating the company’s trade or property business profits. A loss-making company has the option of claiming a tax credit from HMRC. 

On 21 July 2025, the government published a consultation on the design and impact of LRR, which delivered on a commitment made at the Autumn Budget 2024. Introduced in 2001 and overhauled in 2009, LRR was last reviewed in 2011, when the then government rejected the Office of Tax Simplification’s recommendation to abolish it. The current consultation suggests that an improved LRR could have a role to play in supporting the government’s objective to “get Britain building again”.   

The purpose of the consultation is for the government to better understand aspects such as: 

• the impact of LRR on development of brownfield sites;
• how LRR is factored into businesses’ decision making;
• how effective LRR is, and if it is not effective, why not. The government understands that some aspects of the design of LRR may be an impediment to claims. It is seeking views on the following in particular:
  • activities/elements that aren’t covered by LRR;
  • the types of works that are included in the definition of “derelict land”;
  • the impact of the date from which land must be derelict to be considered eligible and the number of additional sites that would become viable if the date were changed from 1998;
  • the “continuous use” requirement, which disqualifies land from LRR that has been in productive use for more than seven days a year; and
  • the exception from LRR where a company or connected party was responsible in any way for causing the contamination or dereliction; and
• the extent to which LRR is robust against abuse and error.

Further information 

• ICAEW TAXline article Is it time to put land remediation relief right? | ICAEW