BlogMembersThe Effect of the Budget on Landfill Tax

The Effect of the Budget on  Landfill Tax

The Effect of the Budget on Landfill Tax

Landfill Tax will increase in line with inflation based on Retail Prices Index (“RPI”), rounded to the nearest 5 pence. The rates of Landfill Tax will not fall below £80 per tonne until at least April 2020.

Material to Landfill Current Rate Rate from 1st April 2017 Rate from 1st April 2018
Standard Rate £84.40 £86.10 £88.95
Lower Rate £2.65 £2.70 £2.80

 

Qualifying Fines

HMRC Guidance LFT1, will be amended to take effect from 1st April 2017, to remove the ‘medium risk’ category in an attempt to simplify the classifications and reduce burdens on Landfill Operators, as they are responsible for the testing, albeit, UROC strongly advocates testing by Mechanical Treatment Operators as well, so that they maintain a level of confidence that the fines they produce will qualify for the lower rate tax.

RISK Indicators Frequency of Testing
LOW

Pre-acceptance checks confirm that the waste processor is consistently producing qualifying fines; and

Inspection prior to disposal indicates that the fines are qualifying materials with no more than an incidental amount of non-qualifying material; and

No more than 1 in the last 20 LOI test results is above the threshold

Test 1 load from that waste processor per waste process for each 1000 tonnes of fines received, or every 6 months, whichever point is reached first.
HIGH

Pre-acceptance checks indicate that the waste processor is unable to consistently produce qualifying fines or is producing qualifying fines with some variability; or

Inspection prior to disposal indicates the presence of more than an incidental amount of non-qualifying materials; or

2 or more of the last 20 LOI results is above the threshold.

Test every load from the waste processor until there has been 20 consecutive compliant tests. Once 20 compliant tests have been achieved the low risk classification will apply unless the pre acceptance checks or visual inspection indicate the material is still high risk.

 

If a Mechanical Treatment Operators are low risk, Landfill Operators must test 1 load every 1000 tonnes. If one load fails, the low risk status will not be affected. The standard rate of tax will be chargeable on the failed load only and the frequency of testing will continue at 1 test every 1000 tonnes.

If more than one load fails in the last 20 tests then the Mechanical Treatment Operator will move into the high-risk category. For high risk Mechanical Treatment Operators, the Landfill Operator will need to test every load. Failed loads will be chargeable at the standard rate of tax. The Landfill Operator will need to test every load until there have been 20 consecutive compliant tests.  Once there have been 20 consecutive compliant tests, the Mechanical Treatment Operator will move back to low risk status and 1 load every 1000 tonnes will be tested.

Illegal Waste Sites

The Government will consult on whether to extend the scope of Landfill Tax to material disposed of at illegal waste sites in England and Northern Ireland. The aim of this measure is to tackle Landfill Tax evasion and deter behaviour which impacts on the environment.

The Landfill Tax (Scotland) Act 2014 already incorporates this measure as a deterrent to illegal dumping and the Welsh Government has proposed this definition in the Landfill Disposals Tax (Wales) Bill, expected to come into force from April 2018.

One concern is that if an illegal waste operator is prosecuted by the relevant environmental regulator and a confiscation order is attached through the proceeds of crime, it would be very doubtful that there would be any ‘money in the pot’ of the illegal operator to also pay the avoided Landfill Tax. Therefore, it may well be that the relevant tax collector, working in conjunction with the environmental regulators, will take priority to recover the avoided tax rather than a prosecution and or confiscation being pursued. 

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