BIM67420 - Waste disposal: Site restoration - payments made on or after 6 April 1989

Any trader who makes a capital site restoration payment (see BIM67540) on or after 6 April 1989 in the course of carrying on a trade is entitled to a deduction within the terms of ICTA88/S91A. There is no requirement that the person claiming relief either deposited waste on the site or is carrying on the trade, wholly or partly, of waste disposal. However, there must be a trade being carried on when the payment is made and so if trade has ceased at the time of the payment it cannot be relieved under ICTA88/S91A.

The deduction should be allowed in computing the profits or gains of the trade for the period in which the payment is made. Therefore no deduction is allowable in respect of a provision for future site restoration payments.

It has been suggested that ICTA88/S91A (3)(a) implies that a provision is allowable. However, the legislation exists to deny a double deduction for expenditure that was relieved by way of a provision according to the practice prior to the Wimpey decision and which could also be claimed when paid under ICTA88/S91A. Thus ICTA88/S91A (3)(a) does not give relief for a provision but rather restricts the relief available under ICTA88/S91A (2).