BIM67505 - Waste disposal: Site preparation expenditure - Tax Bulletin article November 1992

“ICTA88/S91B provides relief for site preparation expenditure in relation to waste disposal sites. We have been asked whether this permits a deduction for expenditure that is of a capital nature. In particular, does it include costs incurred before the disposal licence is granted?

In the case of Rolfe v Wimpey Waste Management Ltd [1989] 62TC399 (see BIM35605) it was held that all expenditure on preparing or making good a landfall site was capital. ICTA88/S91B was introduced specifically to permit the deduction of an 'allowable amount', calculated by reference to site preparation expenditure for which relief would not otherwise be available. (A deduction for restoration expenditure is also permitted, under ICTA99/S91A.)

Site preparation expenditure includes costs incurred before the disposal licence is granted and, in particular, includes expenses associated with obtaining the licence itself. This is subject to the condition that '...a relevant licence which is then in force...' is held at the time the person first deposits waste materials on the site in question (subsection (1)(b)).

Expenditure qualifying for capital allowances is not covered by this section and neither is the cost of acquiring the site itself”.