Part 14Remediation of contaminated F1or derelict land
Chapter 6Supplementary
1170“Staffing costs”
1
For the purposes of this Part the staffing costs of a company are amounts to which any of subsections (2) to (5) applies.
2
This subsection applies to an amount paid by the company to a director or an employee of the company which—
a
is earnings consisting of money, and
b
is paid because of the director's or employee's employment.
3
This subsection applies to an amount paid by the company to a director or an employee of the company, other than an amount paid in respect of benefits in kind, if—
a
the amount is paid in respect of expenses paid by the director or employee, and
b
the amount is paid because of the director's or employee's employment.
4
This subsection applies to secondary Class 1 national insurance contributions paid by the company.
5
This subsection applies to contributions paid by the company to a pension fund operated for the benefit of directors or employees of the company.
6
In subsection (5) “pension fund” means a scheme, fund or other arrangement established and maintained (whether in the United Kingdom or elsewhere) for the purpose of providing pension benefits.
For this purpose “scheme” includes a deed, agreement or series of agreements.
7
In subsection (6) “pension benefits” means pensions, retirement annuities, allowances, lump sums, gratuities or other superannuation benefits (with or without subsidiary benefits).
1171Staffing costs attributable to relevant land remediation
1
This section applies for the purposes of this Part to identify the staffing costs of a company which are attributable to relevant land remediation.
2
The costs which are so attributable are those paid to, or in respect of, directors or employees who are directly and actively engaged in relevant land remediation.
3
Subsection (4) applies if a director (“D”) or employee (“E”) is partly engaged directly and actively in relevant land remediation.
4
In that case—
a
if the time D or E spends so engaged is less than 20% of D's or E's total working time, none of the staffing costs relating to D or E is treated as attributable to relevant land remediation,
b
if the time D or E spends so engaged is more than 80% of D's or E's total working time, the whole of the staffing costs relating to D or E is treated as attributable to relevant land remediation, and
c
in any other case, the appropriate proportion of the staffing costs relating to D or E is treated as attributable to relevant land remediation.
5
Subsection (6) applies if persons provide services (such as secretarial or administrative services) in support of activities carried on by others.
6
Those persons are not, as a result of providing those services, to be treated as themselves directly and actively engaged in those activities.
1172Expenditure on materials
For the purposes of this Part expenditure on materials is attributable to relevant land remediation if the materials are employed directly in the relevant land remediation.
1173Expenditure incurred because of contamination F4or dereliction
1
This section applies to identify cases in which the condition in section 1144(3) is to be treated as met (expenditure incurred because land in contaminated F5or derelict state).
2
If the only reason that expenditure on the land is increased is that the land is in a contaminated F6or derelict state, the amount by which the expenditure is increased is to be treated as expenditure meeting the condition in section 1144(3).
F73
Subsection (4) applies—
a
in the case of land in a contaminated state, if the main purpose of any activities is any of those specified in section 1146(3), or
b
in the case of land in a derelict state, if the main purpose of any activities is any of those specified in section 1146A(3).
4
Expenditure on such works, operations or steps is to be treated as meeting the condition in section 1144(3).
5
This section does not affect the width of the provision made by section 1144(3).
F81174Sub-contractor payments
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1175F3Connected sub-contractors
1
This section applies if—
a
a company makes a sub-contractor payment,
b
the company and the sub-contractor are connected, and
c
in accordance with generally accepted accounting practice, the whole of the sub-contractor payment and all of the sub-contractor's relevant expenditure have been brought into account in determining the sub-contractor's profit or loss for a relevant period.
F91A
In this section, a “sub-contractor payment” means a payment made by the company to the sub-contractor in respect of relevant land remediation contracted out by the company to the sub-contractor.
2
The amount of the sub-contractor payment which is “qualifying expenditure on F10connected sub-contracted land remediation” for the purposes of section 1144(5) is—
a
the entire payment, or
b
if less, an amount equal to the sub-contractor's relevant expenditure.
3
“Relevant expenditure” of the sub-contractor means expenditure that—
a
is incurred by the sub-contractor in carrying on F11or arranging for carrying on, on behalf of the company, the activities to which the sub-contractor payment relates,
b
is not of a capital nature,
c
is F12in respect of staffing costs or materials, and
d
is not subsidised.
4
“Relevant period” means a period—
a
for which accounts are drawn up for the sub-contractor, and
b
that ends not more than 12 months after the end of the company's period of account in which the sub-contractor payment is, in accordance with generally accepted accounting practice, brought into account in determining the company's profit or loss.
5
In the following sections, which apply for the purpose of determining whether a sub-contractor's expenditure meets the requirements of subsection (3)(c) and (d)—
a
section 1170 (staffing costs), and
b
section 1177 (subsidised expenditure),
references to a company are to be read as references to the sub-contractor.
6
Any apportionment of expenditure of the company or the sub-contractor necessary for the purposes of this section is to be made on a just and reasonable basis.
F131176“Qualifying expenditure on sub-contracted land remediation”: other cases
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1177“Subsidised expenditure”
1
For the purposes of this Part a company's expenditure is treated as subsidised to the extent that—
a
a grant or subsidy is obtained in respect of the expenditure, or
b
it is otherwise met directly or indirectly by a person other than the company.
2
For the purposes of this a grant, subsidy or payment that is not allocated to particular expenditure is to be allocated to expenditure of the recipient on a just and reasonable basis.
1178Persons having a “relevant connection” to a company
For the purposes of this Part a person has a “relevant connection” to a company in a case where the company's land is in a contaminated F14or derelict state wholly or partly as a result of any thing done, or omitted to be done, by the person if—
a
the person is or was connected to the company when any such thing is or was done, or omitted to be done, by the person,
b
the person is or was connected to the company at the time when F15a major interest in the land in question is or was acquired by the company, or
c
the person is or was connected to the company at any time when relevant land remediation is or was undertaken (whether by the company itself or on its behalf).
1178AF2“Major interest in land”
1
References in this Part to the acquisition of a major interest in land are to the acquisition of a freehold interest in the land or of a relevant leasehold interest in the land.
2
The reference in subsection (1) to the acquisition of a freehold interest in land is—
a
in relation to land in England and Wales, to the acquisition of an estate in fee simple absolute (whether subsisting at law or in equity),
b
in relation to land in Scotland, to the acquisition of the interest of an owner of land, and
c
in relation to land in Northern Ireland, to the acquisition of any freehold estate (whether subsisting at law or in equity).
3
The reference in subsection (1) to the acquisition of a relevant leasehold interest in land is to the acquisition by grant or assignment (or assignation) of—
a
in relation to land in England and Wales, a term of years absolute (whether subsisting at law or in equity),
b
in relation to land in Scotland, the tenant's right over or interest in a property subject to a lease, or
c
in relation to land in Northern Ireland, any leasehold estate (whether subsisting at law or in equity),
in relation to which the condition in subsection (4) is met.
4
That condition is that—
a
in the case of a grant, the term of years or period of the lease is at least 7 years, and
b
in the case of an assignment (or assignation) the unexpired portion of the term or period is at least 7 years.
1179Other definitions
In this Part —
“controlled waters”—
- a
in relation to England and Wales, has the same meaning as in Part 3 of the Water Resources Act 1991 (c. 57),
- b
in relation to Scotland, has the same meaning as in section 30A of the Control of Pollution Act 1974 (c. 40), and
- c
in relation to Northern Ireland, means water in waterways and underground strata (as defined in Article 2(2) of the Water (Northern Ireland) Order 1999 (S.I. 1999/662 (N.I. 6)),
- a
F16...
F16...
“pollution of controlled waters” means the entry into controlled waters of—
- a
any poisonous, noxious or polluting matter, or
- b
any solid waste matter,
- a
F16... and
F17“UK property business loss”, in relation to a company, means a loss incurred by the company in carrying on a UK property business.
Words in Pt. 14 heading inserted (with effect in accordance with Sch. 7 paras. 27, 28 of the amending Act) by Finance Act 2009 (c. 10), Sch. 7 para. 2