Japanese Knotweed Survey
Japanese Knotweed Photo

CUSTOMERS INFORMATION BOARD

Japanese Knotweed Survey

>contact us > terms & conditions
>home > sample report

Japanese knotweed infestation

Japanese knotweed infestation

 

Japanese knotweed Land Remediation Relief  

tel: 0333 456 7070
mob: 07950 259 905

Introduction

This is an outline of the scheme as it applies to expenditure incurred on or after 1 April 2009 on cleaning up land acquired in a contaminated state. Land Remediation Relief is a relief from corporation tax only. It provides a deduction of 100%, plus an additional deduction of 50%, for qualifying expenditure incurred by companies in cleaning up land acquired from a third party in a contaminated state.

Land or buildings are in a contaminated state if there is contamination present as a result of industrial activity such that:

• it is causing relevant harm; or
• there is a serious possibility that it could cause relevant harm, or
• it is causing, or there is a serious possibility that it could cause, significant pollution in the groundwater, streams, rivers or coastal waters.

“Relevant harm” includes significant adverse impact on the health of humans or animals or damage to buildings that has a real impact on the way the building is used. Qualifying expenditure includes the cost of establishing the level of contamination, removing the contamination or containing it so that the possibility of relevant harm is removed. There is, however no relief if the remediation work is not carried out. Land Remediation Relief is available for both capital and revenue expenditure. However, the company must elect, within two years of the end of the accounting period in which the expenditure is incurred, to treat qualifying capital expenditure as a deduction in computing taxable profits.

In addition to the deduction for the cost of the land remediation, the company can claim an additional deduction in computing its taxable profits. This additional deduction is 50% of the qualifying expenditure. A company can claim this additional deduction at any time within the general time limit for claims under Corporation Tax Self-Assessment. HMRC does not specify any particular form for the claim. A computation reflecting the claim and submitted in time is sufficient. The 50% additional relief is given in the same period as the actual expenditure is charged to the profit and loss account.

A company that makes a loss can surrender that part of the loss that is attributable to Land Remediation Relief in return for a cash payment (a tax credit) from the Government. A claim for a Land Remediation Tax Credit must be made in a CT self-assessment or amended self-assessment. Because Japanese knotweed is an invasive and destructive plant, there are some differences in the way that Land Remediation Relief applies to expenditure on dealing with land infested with Japanese knotweed. The requirement that the land is in a contaminated state at the time of acquisition does not apply to Japanese knotweed. As a result Land Remediation Relief is available where, for example, Japanese knotweed has been introduced to a site by fly-tipping.

Because of developments in the technologies for dealing with Japanese knotweed, Land Remediation Relief is no longer available where material containing Japanese knotweed is taken to landfill. However, all other methods, including the use of off-site treatment centres continue to qualify for relief. In addition, the principle that the polluter should bear the cost of cleaning up any pollution is fundamental to the policy behind Land Remediation Relief. This includes the removal of Japanese knotweed. If a company does not take appropriate action and allows an infestation of Japanese knotweed to spread, then it is treated as the polluter, and is unable to claim Land Remediation Relief. HMRC accept that a company is taking remedial action if it takes appropriate specialist advice, and acts in accordance with that advice. For example, some treatments for Japanese knotweed need to be applied during the growing season. If the company was advised to wait for the next growing season before commencing treatment then HMRC accept that they have acted within a reasonable time, if they commence treatment the following year.

One way that Japanese knotweed is spread is by regeneration from small pieces of rhizome introduced by fly-tipping. As a result an infestation of Japanese knotweed can occur during a period of ownership through no fault of the landowner or occupier and with no realistic hope of redress against the polluter. To reflect this position, the requirement that the land has to be acquired in a contaminated state does not apply to Japanese knotweed. Land Remediation Relief for Japanese Knotweed is therefore unique in this regard.

Although there is no requirement that the land was infested with Japanese knotweed at the time of acquisition, the polluter pays principle still applies. A company that was responsible for planting Japanese knotweed does not qualify for Land Remediation Relief on expenditure for subsequently removing the weed.

Example:

A Ltd purchased a plot of land that had previously been used for residential properties. At that time there was no Japanese knotweed on the site. Subsequently it is found that Japanese knotweed has spread onto the site as a result of fly-tipping. Once they became aware of the presence of Japanese knotweed, A Ltd spent £10,000 on removing it, using an off-site treatment centre. As the requirement that the land must be contaminated at acquisition does not apply to Japanese knotweed, A Ltd can claim Land Remediation Relief. A Ltd is not the polluter, and acted promptly once it became aware of the problem so cannot be said to have contributed to the spread of the infestation through neglecting to act within a reasonable time. The polluter pays principle applies to the removal of Japanese knotweed.

This means that:
• A company that was responsible for planting Japanese knotweed does not qualify for Land Remediation Relief on expenditure for subsequently removing the weed.
• A company that finds it has Japanese knotweed on its property and takes no action thus allowing the infestation to spread so that the area infested is significantly larger by the time that they take action may be debarred from relief under the polluter pays principle.

The question of whether an infestation has spread so much that relief is not available will depend upon the facts of the individual case. HMRC allow relief in cases where the company takes remedial action as soon as practically possible after discovering the infestation.HMRC accept that a company is taking remedial action if it takes appropriate specialist advice, and acts in accordance with that advice.

Example:

B Ltd purchased a plot of land that had previously been used for residential properties. At that time there was no Japanese knotweed on the site. Subsequently it was found that Japanese knotweed had spread onto the site as a result of fly-tipping. B Ltd takes no action at that time as there has been a downturn in the housing market. The infestation of Japanese knotweed spreads so that by the time the market changes and B Ltd takes action to remove the Japanese knotweed; it covers much of the site. B Ltd is unable to claim Land Remediation Relief as the Japanese knotweed spread considerably due to the failure of B Ltd to take action within a reasonable time.

Example:

A visitor to C Ltd identifies Japanese knotweed growing around the car-park. C Ltd had been unaware that the plant was Japanese knotweed. There is no indication of how long the knotweed has been there, but C Ltd did not plant it. As a result of the visitor’s comments, C Ltd carry out research and contact a specialist removal firm. The specialist advises that C Ltd should wait until the following growing season before commencing a chemical treatment. The following year, C Ltd engages the specialist firm to treat the infestation. The treatment is spread over several years.C Ltd can claim Land Remediation Relief. Although the Japanese knotweed had been growing for some time, C Ltd acted quickly, and in accordance with specialist advice, once the knotweed was identified.

There are various methods of dealing with Japanese knotweed. From 1 April 2009 methods of dealing with Japanese knotweed that involve the removal of material to a landfill site (often called “dig and dump” are excluded from the relief. Methods of dealing with Japanese knotweed that are applied in situ or at off-site treatment centres continue to qualify for the relief.

Example:

D Ltd purchased a plot of land that had previously been used for residential properties. There was an infestation of Japanese knotweed. D Ltd has the opportunity of a quick sale, so spends £10,000 on the removal of the Japanese knotweed to a landfill site. D Ltd cannot claim Land Remediation Relief as expenditure on removing Japanese knotweed to landfill sites has been excluded from the relief.

Example:

E Ltd purchases a plot of land for re-development. When work is about to begin, they find that there is an infestation of Japanese knotweed due to fly-tipping. E Ltd spends £10,000 on having the soil that may contain Japanese knotweed treated at an off-site treatment centre, before being returned to the site and used for landscaping. For work carried out on or after 1 April 2009 there is no requirement that the Japanese knotweed has to be present when the site was acquired.
Although material is removed from the site for treatment, this is only a temporary removal. The method does not involve the use of landfill and E Ltd can therefore claim Land Remediation Relief.

 Knotweed Id Service >>

> Japanese knotweed survey

Approval has been given for an insect to be released to control the invasive Japanese knotweed in the North East.

The rampant plant, which was introdu ...
read more >>

> Japanese knotweed survey

A homeowner who tried to remortgage his £400,000 property had his application refused because of Japanese knotweed in his garden.

Dave Williams, 42, w ...
read more >>

> A formidable problem

You should aim to completely eradicate the knotweed before any construction works commence, unless you want to incur delays and major expense at a later stage ...
read more >>

 

Company’s Registered Office Address: 597 Etruria Rd, Basford, Stoke On Trent, Staffordshire. ST4 6HP.
Japanese Knotweed Survey © Copyright 2011

Japanese knotweed survey, management, control, eradication & land remediation relief.
Areas include Staffordshire, Cheshire, West Midlands, Manchester, Birmingham & Stoke On Trent.

Hosted by Square-Sun Web DesignSquare-Sun Web Design logo