Housebuilders' land under scrutiny

Housebuilders’ land will be placed under greater scrutiny by the corporate reporting watchdog this year as losses mount, hitting tax revenues.

The Financial Reporting Council (FRC) has announced it will highlight writedowns and impairment related to land assets this year.

It has identified housebuilders as a priority sector as major firms have just completed land writedowns totalling over £1bn so far.

The Financial Times reported the writedowns typically result in extraordinary losses and lower tax bills.

It reported that UK tax law allowed companies that swing into loss to get a refund on part of the tax paid and may reclaim payments made to tax authorities for current tax liabilities.

These rules could lead to large sums being disbursed by HM Revenue & Customs.

According to the newspaper, Taylor Wimpey is expecting to receive £90m in cash back following a £690m writedown, while Redrow could get £35m back following its own writedown.