HMRC launches consultation on Land Remediation Tax Relief

The consultation, that was published on 21 July 2025, asks 18 questions across four main areas:

• the impact of LRTR on development of brownfield sites;
• how the relief is factored into businesses’ decision making;
• how effective the relief is; and if it is not, why not; and,
• the extent to which it is robust against abuse.

HMRC says, “this consultation seeks to review the effectiveness of LRR [Land Remediation Relief] and determine whether it is still meeting its objective of boosting development of brownfield land. It also seeks to improve understanding of how robust the relief is against potential abuse.”

Land Remediation Tax Relief (LRTR) was introduced in 2001 to provide tax relief to developer and investor Corporation Tax payers for clearing up contamination on brownfield sites and later amended in 2009 (with these being the current rules in place) to include derelict sites.  The consultation document provides that LRTR is “aimed at incentivising the regeneration of brownfield land and reducing the pressure to develop greenfield sites”.

However, the tax relief could be better suited to support investment in brownfield regeneration, especially with government housing targets evolving and pressure to deliver.  There has been widespread discussion and lobbying in the industry, including from our own Alun Oliver FRICS, who has been on a LRTR consultative panel via his role with the Chartered Institute of Tax (CIOT) and liaising with both HM Treasury and HMRC, to amend the legislation to make it better understood, less punitive, and assist those who can benefit with uptake, to drive its purpose – incentivising regeneration.

As the tax relief is currently available at up to 150% relief on remediation costs, this represents a huge opportunity for developers and investors to be supported in meeting the government commitment of “a brownfield first approach, prioritising the development of previously used land wherever possible”.  The relief is available on costs related to remediating sites that have contaminants such as asbestos, hydrocarbons, arsenic, radon and Japanese Knotweed, that are, or have a serious possibility of, causing harm/damage to buildings, humans, animals or watercourses.  As well as the costs of clearing up former ground structures/utilities of long-term derelict land.

E³ Consulting will be providing our own response to HMRC on these matters, bringing together our experience of establishing claims for clients, the commentary we hear from our conversations, and through discussion with our existing clients and project contacts.

Should you, or a colleague, have specific representations about any of the questions, please do get in contact.  We will be providing a balanced response to all questions and input from the wider marketplace will only help to ensure that HMRC can get a true understanding of marketplace sentiment and the importance of this tax incentive in helping to mitigate the exceptional costs involved in brownfield regeneration and encourage growth in housing and economic prosperity.

The consultation closes at 11:59am on 15 September 2025.

The full consultation document, as published on the Gov.uk website is available for download on the right side of this page.