In July 2026, the government published a consultation document seeking views on a package of measures to reform LRR. Concerned that LRR was “not fully achieving its objective of incentivising the remediation and redevelopment of brownfield land”, the government proposed:  

• aligning applications for LRR with local authority planning processes;
• revising the definition of ‘derelict land’; and 
• bringing forward the date of relief for some companies. 

Further details are provided in an earlier article.  

In its response to the consultation (ICAEW Representation 82/26, to be published at 2026 Tax Representations | ICAEW in due course), ICAEW has broadly welcomed the government’s proposals, commenting that some companies may be more incentivised to carry out remedial work as a result of proposed changes.  

However, feedback from ICAEW members is that LRR often does not provide sufficient incentive to choose to develop a derelict or contaminated site, especially where the costs of clearing the land are prohibitive. 

Responding to the specific proposals, ICAEW says that: 

• the government may have underestimated the practical difficulties in aligning LRR applications with local authority planning processes, and that some developments would be left under the old regime, creating a two-track system; 
• the revised definition of ‘derelict land’ contains too many exceptions which would exclude the availability of relief; and
• although the bringing forward of relief for developers is likely to have the biggest positive impact, in many cases it would still not change the decision as to whether a development would go ahead. 

ICAEW has suggested three other reforms which it believes would have a greater impact in incentivising the remediation of contaminated or derelict land: 

• extending LRR beyond companies (eg, to partnerships and limited liability partnerships). This would help to widen its availability and bring more potential claimants within scope. It would be particularly important in respect of joint venture arrangements where a corporate entity is often not set up to carry out the development as it would only have a limited life;
• bringing forward the financial effect of LRR. This would help to make it a genuine support for remediation work, rather than a reward for work that has already happened. Examples could include a grant-based system or a deduction against VAT or pay as you earn (PAYE) liabilities; and
• introducing a pre-approval or clearance system scheme. This would help to provide greater certainty that LRR will be available and therefore more confidence that the work can be carried out with the tax outcome in mind.