BIM67500 - Waste disposal: Site preparation - calculation of relief - example 2
The following is an example of expenditure incurred before 6 April 1989.
EXAMPLE
Site preparation expenditure of £1,200 was incurred on a waste disposal site in the year to 31 December 1988. None of the expenditure qualified for capital allowances or was allowed as a revenue deduction. The total capacity of the site was 800 cubic metres, and it was used as follows:-
| Year to | Cubic metres | |
| 31.12.88 | £100 | |
| 31.12.89: 1.1.89 - 5.4.89 | £100 | |
| 31.12.89: 6.4.89 - 31.12.89 | £200 | £300 |
| 31.12.90 | £400 | |
| £800 |
Year to 31.12.88
No relief is available for a period of account ending before 6 April 1989.
Year to 31.12.89
A is reduced by the formula E x F / F + G where:-
E = pre 6.4.89 expenditure
F = pre 6.4.89 volume deposited
G = unused site capacity at 6.4.89.
Thus, in this case
E = £1,200
F = 200 cubic metres
G = 600 cubic metres
| A = £1,200 - (£1,200 x | £200) | = £900 |
| (£200 + £600) |
C is reduced by the volume of material deposited in the period from 1.1.89 to 5.4.89, that is, by 100 cubic metres.
Thus, in the formula (A - B) x C / C + D:-
A = £900
B = Nil
C = 300 - 100 = 200 cubic metres
D = 400 cubic metres
| Relief = £900 x | £200 | = £300 |
| £200 + £400 |
Year to 31.12.90
In the formula
A = £900
B = £300
C = 400 cubic metres
D = Nil
| Relief = (£900 - £300) x | £400 | = £600 |
| £400 |
