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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 before 31 March 2009.

Relevant expenditure of the sub-contractor is expenditure that is incurred by the sub-contractor in carrying out the land remediation activities to which the sub-contractor payment relates, that is:

  • incurred on employee costs (see CIRD69005) and materials,
  • not of a capital nature, and
  • not subsidised (see CIRD63130).

If a sub-contractor, who is a connected party, in turn further sub-contracts work, then the payment to that sub-contractor does not qualify for relief.


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 cannot claim Land Remediation Relief in respect of the payment made by B Ltd to C Ltd. B Ltd cannot have relief because they are a subcontractor and it is A Ltd that bears the costs, see CIRD63140.

Had A Ltd engaged the services of the specialist firm, C Ltd, itself then it would have qualified for Land Remediation Relief.