Income Tax (Trading and Other Income) Act 2005 section 168

Site restoration payments

Section 168 provides a tax deduction for payments made by a trader towards restoring sites used for waste disposal, subject to anti-avoidance rules and specific timing conditions.

• A trader can deduct the "unrelieved amount" of a site restoration payment — that is, the payment less any amounts already covered by capital allowances or previously deducted in calculating trade profits
• Where the payment is made to a connected person, the deduction is only available in the period when the relevant restoration work is actually completed; in all other cases, the deduction is available in the period the payment is made
• No deduction is allowed if the payment arises from arrangements to which the trader is a party and a main purpose of those arrangements is to obtain a deduction under this section
• A "site restoration payment" is a payment made to restore a site in order to comply with a waste disposal licence condition, a planning permission condition for waste activities, or a relevant planning obligation under planning legislation