Treasury minister Angela Eagle has rejected warnings by the Environmental Industries Commission that the new land remediation relief which has replaced the landfill tax exemption for contaminated soil is, effectively, useless and has offered merely some improvements to the guidance.
The EIC has become increasingly concerned that the supposedly revenue-neutral change has replaced a worthwhile stimulus to brownfield remediation with one that is unusable.
Consultations with its 200 member companies yielded just one site where the extended relief was likely to be claimable and since then that developer has pulled out of the development, citing risk of upfront remediation and infrastructure costs as one reason.
But Ms Eagle rejected calls to allow developers to claim LRR in the year in which they incur the cost because it would conflict with the way corporation tax works and she offered merely guidance to help companies cope.
On the issues of the extent and cost of claiming LRR and the possibility of retaining the landfill tax exemption for asbestos, she said the Government had previously consulted on these issues and they would not, therefore, be changed.
She rejected too calls to change the definition of "long-term derelict" from 1998 to 2003 as this too had been "examined as part of the decision making process" and merely noted that the possibility of raising LRR from 150% to 250% would be considered in the budget process in the same way as any other tax changes.
"The Government will continue to provide support for people and businesses affected by the consequences of the global financial crisis, through the measures announced in the PBR and since," she concluded.
The EIC has responded to HM Revenue and Customs noting the fact that potential LRR sites had reduced from one to zero and renewing its call for reform.
