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HMRC internal manual

Corporate Intangibles Research and Development Manual

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.


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.