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HMRC internal manual

Business Income Manual

Waste disposal: site preparation: calculation of relief

S166 Income Tax (Trading and Other Income) Act 2005, S143 Corporation Tax Act 2009

Where site preparation expenditure is incurred on a particular site, the amount available for relief for any period of account is calculated by a formula the purpose of which is to allow only as much of the qualifying expenditure as relates to the proportion of the total site capacity utilised in the period. The formula for calculating the relief for any period is:

RE x WD / SV + WD


RE is the site preparation expenditure incurred by the trader on the site at any time before or during the period in question. However, it does not include:
* expenditure already allowed as a deduction for any previous period of account;
* expenditure qualifying for capital allowances.
WD is the volume of waste materials deposited on the site during the period of account. The volume in question means the final net volume of the waste when compacted.
SV is the volume of the site not used up for the deposit of waste materials at the end of the period of account.

Note that there are special rules for expenditure incurred before 6 April 1989 on a site which is still in use which are not covered in this guidance.