CIRD63245 | Land Remediation Relief: Subcontractors: Payments to a connected sub-contractor - relevant expenditure of the sub-contractor

This section applies to expenditure incurred on or after 1 April 2009

Relevant expenditure of the sub-contractor is expenditure that is incurred by the sub-contractor in either:

• carrying out the land remediation activities to which the sub-contractor payment itself relates, or

• arranging for a third party to carry out that work.

The relevant expenditure is restricted to expenditure that is:

• incurred on employee costs or materials;

• not of a capital nature; and

• not subsidised.

Example

A Ltd engages the services of a connected party, B Ltd, to construct a new office building. B Ltd then engages the services of a specialist firm, C Ltd, to remove Japanese Knotweed from the site.

A Ltd can claim Land Remediation Relief in respect of the payment made by B Ltd to C Ltd in respect of staffing or material costs. This is because B Ltd incurred these costs when it arranged for C Ltd to carry out the work on behalf of A Ltd.