BIM67450 - Waste disposal: Site preparation: Capital expenditure

The decision in Rolfe v Wimpey Waste Management Ltd [1989] 62TC399 established that all expenditure on preparing a site for waste disposal was capital and thus precluded a deduction for such expenditure on normal Schedule D Case I principles. ICTA88/S91B was introduced specifically to permit the deduction of an 'allowable amount' calculated by reference to site preparation expenditure which would not otherwise be allowable.

Its broad effect is to allow for any period of account an amount equivalent to so much of the total qualifying expenditure on a particular site as corresponds to the proportion of the total site capacity used up in that period. Relief will continue to be given over the life of the site until the total capacity is exhausted.

Relief may be claimed for a period of accounts ending after 5 April 1989. There are special rules for

• expenditure incurred before 6 April 1989 on a site which is still in use at that date,

and

• periods of account beginning before 6 April 1989 and ending on or after that date.