UK: Environment Bulletin: Environment Policy

Last Updated: 19 December 2007
Article by Maria Cull, Sebastian Charles and John Garbutt

New Tax Decision On Site Restoration Costs

Section 91A of the Income and Corporation Taxes Act 1988 provides that certain site restoration payments are deductible for tax purposes. For corporation tax purposes, a site restoration payment (as defined in section 91A) which is made in the course of carrying on a trade can be deducted against the profits of the trade for the period in which the payment is made. There are equivalent provisions for income tax in the Income Tax (Trading and Other Income) Act 2005.

Section 91A was introduced as a result of the decision in Rolfe (Inspector of Taxes) v Wimpey Waste Management Limited 1989 STC 454). This case held that a site restoration payment was capital and so could not be deducted against profits of the trade since it was not revenue expenditure. Section 91A provides that a site restoration payment (which would be a capital payment as a result of Wimpey) is deductible when it is made, except to the extent that any amount has already been allowed as a deduction in a preceding period. It has been suggested that this implies that a provision for capital expenditure is allowable, on the basis that a deduction could only be given before payment if a provision for the payment is allowable. However the view of HMRC, confirmed in a recent Special Commissioners' case (Dispit Ltd v Revenue & Customs Commissioners SpC 579 (2007)), is that rather than extending the deduction to provisions for capital expenditure, the legislation is simply ensuring that a deduction is not allowed twice. It does this by denying a deduction for expenditure that has already been relieved before payment, as a result of a provision made before the Wimpey decision when it would have been in respect of a revenue item and so deductible.

If accounting provisions have been made for site restoration payments, do not assume that the provisions will be deductible for tax purposes. This latest case confirms HMRC's view that a provision for a capital site restoration payment is not deductible and a deduction will only be given when the payment is made (although a provision for revenue expenditure would generally be allowable on normal principles).

Government Publishes Energy White Paper

A white paper setting out the government's energy strategy, with particular emphasis on climate change responses and the provision of clean and affordable energy was recently published by the DTI. The government sees the priorities as including:

  • The cutting of CO2 emissions by some 60% by about 2050, with real progress by 2020;
  • The maintenance of the reliability of energy supplies;
  • The promotion of competitive markets in the UK;
  • Ensuring that every home is adequately and affordably heated.

As expected, the government, faced with the need to look for a decline in fossil fuel use, is giving emphasis to new nuclear facilities. For more information on these matters please contact the Planning and Environment Group.

Dangerous Substances Regulations Amended

Changes to dangerous substances requirements came into force on 30 June 2007. The Controls on Dangerous Substances and Preparations (Amendment) Regulations 2007 SI2007 No 1596 provide a substitute schedule 1 to the Controls on Dangerous Substances and Preparations Regulations 2006. The changes are necessary to give effect to EU directive 2006/139/EC. Schedule 1 deals with substances, preparations and restrictions relating to a range of dangerous substances, in the main arsenic compounds.

Emissions Trading - Amending Regulations

The Income Tax (Trading and Other Income) Act 2005 provides for the Treasury to specify energy saving items the cost of which can be deducted by residential landlords when calculating the profits of their business. The Energy Saving Items Regulations 2007 SI2007 No 831 came into force on 6 April and provide a substitute list of items which are deductible for income tax purposes. These include:

  • Hot water system insulation;
  • Draught-proofing;
  • Solid wall insulation;
  • Floor insulation.

The maximum amount of expenditure which can be taken into account is Ł1,500 per dwelling house. The new Regulations replace similarly named provisions of 2004, 2005 and 2006.

Contaminated Land - Appeal Succeeds

In the Winter 2006 edition of the Environment Bulletin we reported on a High Court case which concluded that National Grid Gas plc had inherited substantial liabilities for contaminated land from its statutory predecessors. Because of the important issues arising from the case, the appeal bypassed the Court of Appeal and was heard by the House of Lords. Their decision was issued recently. The High Court's decision was overturned. In R (National Grid Gas plc) -v- Environment Agency (2007) UK HL30, the Lords heard that, following housing development, a resident had discovered a pit filled with coal tar in his back garden. The site was subsequently classified as contaminated land and steps were taken by the Environment Agency to secure clean up. The Agency had identified two potential responsible parties, the residents as current owners of the site and NGG, by virtue of attributed liability down the 90 year chain of ownership transfers described in the case. It seems that the contamination had originally arisen from the use of the land by various gas boards and, by a series of statutory and other transactions involving British Gas plc and others, the ownership of the land had passed though the hands of NGG. The Environment Agency had chosen to pursue NGG and the matter was referred by the company to the High Court for a decision. The view of the High Court judge, supporting the Environmental Protection Act's "polluter pays" culture and its retrospective effect, was not accepted by the House of Lords. The Lords decided that the emphasis in the legislation was on the actual polluter. During the transactional history whereby NGG had come into ownership of the land in question, the liabilities of the state owned area boards were expressly limited to those existing "immediately before" the transfer date. The House of Lords concluded that such language could encompass a liability created by parliament, but very careful statutory language would be needed to impose on a company innocent of any polluting activity a liability to pay for works to remedy pollution caused by others. They concluded that it would be impossible to read into the legislation any intention that parliament should impose liabilities on a public company where shares had been offered at large on one basis, ie that there were no ongoing liabilities of this sort, and then to impose those retrospectively. The Court found that there was no liability on NGG.

The effect of this case is to throw the liability either back onto individual landowners, no doubt not resourced to pay, or on the local authorities. The case is very important in that it could constrain the right of the regulator to go back to past owners to service these types of long term liabilities.

New Natuaral Habitats Regulations

European Directives on the conservation of wild birds and of natural habitats have been in force since 1979 and 1992. For the most part UK government has secured implementation of those directives but there remain further requirements which have now been dealt with under two sets of regulations. Both of these came into force on 21 August 2007.

The Offshore Marine Conservation (Natural Habitats Etc) Regulations 2007 SI2007 No 1842

These provisions apply to those marine areas where the UK has jurisdiction beyond its territorial sea and cover offshore marine areas, installations and certain ships and aircraft. They make provision for:

  • Conservation of natural habitats and habitats of species, including the identification and protection of European offshore marine sites, site protection and management and the requirement for plans and projects.
  • The protection of species including specified birds and wild animals as well as plants.
  • The provision for licences to undertake activities normally banned by the regulations.
  • Provisions for enforcement, including criminal offences.

The Conservation (Natural Habitats Etc) (Amendment) Regulations 2007 SI2007 No 1843.

These regulations provide for significant amendments to the Conservation (Natural Habitats Etc) Regulations 1994.

The changes include the following:

  • National Park Authorities become responsible in relation to marine areas and European marine sites, where appropriate.
  • Specific duties are placed on the Secretary of State and Welsh Ministers in relation to surveillance of the conservation status of natural habitat types.
  • A ban on the introduction from any ship into territorial waters of any live animal or plant not native to Great Britain.
  • New enforcement provisions, particularly in relation to the disturbance of a European protected species.
  • Obligations on plan making authorities to have regard in their land use plans to any implications for any European site in Great Britain or any offshore marine site.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.