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HMRC internal manual

Business Income Manual

Waste disposal: site preparation: conditions

S165-S167 Income Tax (Trading and Other Income) Act 2005, S142-S144 Corporation Tax Act 2009

A deduction in computing profits is allowed to a person who carries on a trade and incurs site preparation expenditure in the course of carrying on the trade. The trade need not be wholly, or include, waste disposal. However, the trader must both:

  • incur, in the course of the trade, site preparation expenditure in relation to a particular waste disposal site, and
  • hold a waste disposal licence (see BIM67545) which was in force at the time he first deposited waste materials on the site.

The waste disposal licence need not be held or in force when the expenditure is incurred but it must be in force when the person first deposits waste materials on the site.

A deduction is not available where one person actually incurs the expenditure but recharges it to another person who holds the waste disposal licence when first depositing waste. In such circumstances the two essential elements for relief are in two different hands and no relief is available to either person.

If the person incurring expenditure never deposits waste on the site under the terms of a relevant licence no relief is available.