UPDATE ON LAND REMEDIATION RELIEF CASE
UPPER TIER TRIBUNAL – 21st JULY 2021
NORTHERN GAS NETWORKS LTD V THE COMMISSIONERS FOR HMRC
Following the decision reached by the First Tier Tribunal (FTT) where they agreed with HMRC’s decision to refuse a claim for land remediation relief, the case was appealed by Northern Gas Networks Limited (NGN) and it was taken to the Upper Tribunal (UT).
The UT reached the same decision as the FT – in that the replacement of gas pipes required to prevent harm or risk of harm did not qualify for land remediation relief as NGN were responsible for piping the gas and so were deemed to be contaminating the land themselves.
Background
NGN transported gas under private roads in iron pipes that had been laid by another company. The pipes had to be replaced and improved as there was a risk of the gas leaking and contaminating the surrounding area.
NGN had claimed land remediation relief for expenditure incurred in replacing and improving the pipes on the basis that the contamination was as a consequence of the state of the gas pipes that had been laid by another company.
UT Conclusion
The court considered the intention of how the relief was to be given by parliament. The legislation sets out that relief is denied where the land is contaminated wholly or partly as a result of the claimant company’s actions. Whilst NGN had not laid the pipes themselves, the contamination arose partly as a consequence of the gas that NGN was piping through them.
The court decided that the legislation was not concerned with the rationale as to why the company acted as it did; it was ‘simply concerned with the question whether the land is in a contaminated state wholly or partly as a result of those actions’.
The UT concluded that the land was contaminated as a result of its activity of distributing gas and therefore dismissed the taxpayers appeal.
