Commercial Developer

Lifecycle

Commercial developers are entitled to claim Land Remediation Relief when developing brownfield sites provided key entitlement conditions are met.  They are not entitled to claim capital allowances but they can nonetheless improve the investment value of their development by taking a more tax aware approach when designing and procuring their projects.

Outlined below are the issues that need to be considered at each stage of the project lifecycle to make sure the benefits from the tax relief are fully realised.

BUY

+ Pre-Acquisition Advice: Land

Pre-Acquisition Advice: Land

The Issue: the purchaser of land for development may be entitled to claim Land Remediation Relief (including derelict land) provided the entitlement conditions are satisfied. Misconceptions persist over the impact of any price reductions due to contamination and companies need to make sure they acquire the right interest in land (minimum 7 year lease) and avoid any connection with the polluter.

How we Help:

  • We advise on the key risks to be aware of.
  • We review the terms of the contract and confirm the basis of any claim.
  • We advise of any corrective measures if entitlement is threatened.
  • We provide estimates of the relief.

Benefit to the Client:

  • Empowered: provides you with a stronger negotiating position.
  • Reassured: that you are not falling foul of any of the rules preventing entitlement.
  • Improved cash flow: tax relief benefits will be realised as intended.

Why use the TFI Group?

DEVELOP

+ Entitlement Reports

Entitlement Reports

The Issue: On more complex projects involving multi-stakeholders and legal entities it can sometimes become unclear who has entitlement to claim any available tax incentives. 

How we Help:

  • We review the structure and confirm where entitlement sits.
  • We provide an estimated value of the relief.

Benefit to the Client:

  • Reassured: Allows you to confidently factor the benefit of the incentives into the investment decision.
  • Protected: Allows corrective action to be taken if entitlement threatened.

Why use the TFI Group?

+ Pre-planning

Pre-Planning

The Issue: Often claims are made after the expenditure is incurred meaning any opportunities for designing and procuring in a more tax efficient way are lost resulting in compromised claims. This is particularly relevant on complex remediation projects where the boundaries between geotechnical and environmental activities are blurred and where relevant qualifying costs become difficult to isolate.

How we Help:

  • We guide the design team through the key eligibility issues.
  • We review the project with the design team to establish the scope of activities likely to attract tax relief.
  • We advise the design team on specification, design and contractor procurement matters aimed at clarifying the allowable expenditure.

Benefit to the Client:

  • Connected: tax teams and design teams aligned towards a common goal.
  • Protected: A suite of project documents that fully supports the claim thereby making the claims more robust in the event of an enquiry from HMRC.
  • Improved cash flow: A project that realises the full tax relief potential.

Why use the TFI Group?

+ Land Remediation Relief Claims

Land Remediation Relief Claims

The Issue: The only corporation tax relief available to developer traders is Land Remediation Relief (including derelict land) and yet many qualifying costs go unclaimed due to misconceptions and lack of specialist expertise.

How we Help:

  • We review the project details and confirm entitlement and scope of eligible costs.
  • We review all relevant technical, design and commercial data.
  • We dissect and certify the qualifying project costs.
  • We ensure the claim is fully reconciled to supplier’s final accounts and the project’s total spend.

Benefit to the Client:

  • Improved cash flow: c.10% of remediation costs recovered in the year of land sale.
  • Cash from losses: 16% tax credit available on surrendered losses up to 150% of qualifying remediation costs.
  • Reassured: that all allowable tax incentives will be identified.

Why use the TFI Group?

LEASE INCENTIVES

+ Lease Incentives: Contributions

Lease Incentives: Contributions

The Issue: When negotiating lease incentives one option is to contribute towards the tenant’s fit out costs.  These contributions can attract valuable allowances and reliefs.  Tax relief can therefore be lost if not planned properly. 

How we Help:

  • We advise the landlord on the best way to structure the contribution to achieve the desired outcome.
  • We liaise with your legal team to highlight the key issues to be addressed in the contribution agreement.

Benefit to the Client:

  • Improved cash flow: A contribution that is arranged in the optimum way for the landlord.
  • Good Governance: For non-tax payers an ability to capture valuable tax benefits to pass onto subsequent purchasers.

Why use the TFI Group?

SELL

+ Sales Aids

Sales Aids

The Issue: Availability of Capital Allowances can significantly improve the attractiveness of a commercial investment but sellers still fail to fully promote the tax benefits to potential purchasers especially in instances where the seller has no interest in the tax relief themselves (housebuilders / developers / non-tax payers).

How we Help:

  • We provide sellers with an estimate of the allowances.
  • We provide the net present value cash benefit likely to be derived by the buyer.
  • We provide a Capital Allowances Sales Aid  to be included in the marketing material.

Benefit to the Client:

  • Marketability: Increased value and attractiveness of the investment.
  • Protected: Removes the possibility of delay in the sale resulting from incomplete allowances information.
  • Empowered: A stronger negotiating position.

Why use the TFI Group?

CORPORATE SERVICES

+ Land Remediation Relief Historic Reviews

Land Remediation Relief Historic Reviews

The Issue: Many housebuilders and developers fail to claim their rightful entitlement to land remediation relief with the loss of valuable cash flow for their business. Thankfully, this position can be remedied by identifying previously unclaimed costs on sites which have been sold over the business’s four previous accounting periods.

How we Help:

  • We review and comment on any existing processes adopted to capture qualifying relief.
  • We review and comment on the content of any claims previously prepared.
  • We define the scope and phases of the historic review and advise on any time limits that apply.
  • We prepare a programme to carry out the review (typically with a pilot phase for larger companies).
  • We carry out training sessions to create awareness and inform the process.
  • We prepare the claims on the agreed review sites.
  • We advise of the process required to claim the resulting tax rebate.

Benefit to the Client:

  • Improved cash flow: a tax rebate plus interest for previously unclaimed relief.
  • Reassured: that all allowable tax relief has been claimed and personnel better informed.
  • Brownfield Promoted: greater awareness of incentives to promote brownfield development.

Why use the TFI Group?

+ Land Remediation Relief Annual Summaries

Land Remediation Relief Annual Summaries

The Issue: Land Remediation Relief is typically claimed in the year the remediated land / development is sold.  This creates a disconnect between the year the qualifying costs are incurred and the year they are claimed.  Failure to properly manage the transition from cost to claim could result in confusion and ultimately lost relief. 

How we Help:

  • We review all development sites annually to ensure no claims get missed.
  • A high level technical review will be undertaken on all sites which achieved their first legal completion in that year to assess the potential to make a claim.
  • We summarise all new qualifying expenditure incurred in the year.
  • We track land / plot sales so the correct proportion of qualifying costs are claimed.
  • We provide a full audit trail from site costs through to an executive summary indicating the amount of relief due in each year.

Benefit to the Client:

  • Reassured: that all sites with claim potential will be identified.
  • Improved cash flow:  claims made at the earliest opportunity.
  • Protected: full reconciliation and audit trails provided.

Why use the TFI Group?

+ Corporate Acquisition Due Diligence

Corporate Acquisition Due Diligence

The Issue: Corporate acquisitions often contain property, land or trading stock.  The full amount of tax relief is rarely claimed meaning there is often scope to add value for the new shareholders post acquisition.  This is particularly the case for regional housebuilder acquisitions where Land Remediation Relief has rarely been maximised.

How we Help:

  • We form part of the due diligence team to do a targeted piece of work looking specifically at the latent value of unclaimed tax incentives.
  • We review the land remediation relief (and capital allowances) claims made by the company.
  • We reconcile the claimed tax incentives against the property, development and land holdings.
  • We summarise the risks and opportunities relating to that part of the acquisition.
  • We provide estimates of the latent value inherent in the acquisition as a result of unclaimed tax incentives.

Benefit to the Client:

  • Reassured: you will know the detail of what you are buying.
  • Empowered: with information to negotiate a better deal.
  • Improved cash flow: opportunities for tax rebates and tax planning opportunities realised.

Why use the TFI Group?

+ Negotiation with HMRC

Negotiation with HMRC

The Issue:  A tax inspector typically has two years after the year end in which a claim has been made to raise an enquiry into a claim.  This can come in the form of eligibility or entitlement challenges from the tax inspector or from the Valuation Office on queries relating to costs. 

How we Help:

  • We enter into correspondence with HMRC authorities either direct or through your accountant as instructed.
  • We construct legal arguments as necessary with reference to case law, legislation and HMRC’s own guidance notes.
  • We support any costs with reference to source pricing documents, our own database of costs or from industry recognised pricing sources such as Spons.
  • We keep our client’s advised throughout the process and make recommendations as necessary to ensure a speedy conclusion to the enquiry.

Benefit to the Client:

  • Protected: against any unjustified reductions in claim values.
  • Improved cash position: reduced tax relief leakage.

Why use the TFI Group?

+ Training

Training

The Issue: Successful claims often rely on a small amount of participation from a large range of people.  However, these people are rarely aligned, misconceptions and confusion abound and businesses rarely have the specialist knowledge to navigate their way through increasingly complex tax legislation.

How we Help:

  • We listen to understand what the key training requirements are.
  • We provide training for tax teams to help highlight the key tax planning opportunities.
  • We provide training for commercial and technical teams so they can procure in a more tax intelligent way.
  • We provide training for land buyers so they can ask the right questions.
  • We help bridge the gap between the various departments so everyone works towards a common goal.

Benefit to the Client:

  • Empowered: with the knowledge to ask the right questions and make better decisions.
  • Improved cash flow: ability to negotiate a better deal.
  • Protected: against the possibility of delay due to incomplete information.

Why use the TFI Group?

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