In a new definition of environmental taxes, the Treasury has announced that income from landfill tax is set to increase by £100 million between 2014/15 and 2015/16 as part of a move to double the proportion of revenue brought in from thesetaxes.
The Office of Budget Responsibility projections, originally released in the Budget 2012, say that revenue from landfill tax will rise from £1.5 billion in 2014/2015 to £1.6 billion in 2015/2016, despite no scheduled rise for the landfill tax chargeable rate in this period. Chargeable rates for landfill tax will rise from £64 a tonne in 2012 to £80 a tonne by 2014, but the increases in the projected landfill tax revenue between 2014/2015 and 2015/2016 suggest that these may rise further.
A spokesperson told Resource that though he cannot comment on policy, the believed the Treasury’s general intention was to recognise the behavioural effect green taxes can have: “We’re not doubling revenue, but the forecast shows that the proportion of tax revenue brought in by environmental taxes is forecast to double (as outlined in the Coalition agreement pledge), to increase the proportion of taxes raised as a reflection of the importance of changing waste behaviours.
“Yes, It’s right to say that for example, the landfill tax rate will go up as the carbon price floor goes up over the course of the period. That’s why the amount of revenue is forecast to go up but those revenue figures aren’t new. However, this is not an announcement of any new or increased taxes, it’s just a statement about how we define environmental taxes and a reiteration of the forecast from the Office of Budget Responsibility about what the revenues from those taxes will be over the next four or five years.
“Our number one priority is reducing the deficit, but we also want to make sure that it doesn’t add burdens to businesses.”
Other taxes set to be bringing in a higher proportion of revenue include: Climate Change Levy, EU Emissions Trading System (EU ETS), Carbon Reduction Commitment Energy Efficiency Scheme and Carbon Price Support.
Environmental taxes are now defined as: being linked to the government’s environmental objectives; having a primary objective of encouraging environmentally positive behaviour change; and being structured in relation to environmental objectives.
Announcing the definition on Monday (16 July), Economic Secretary to the Treasury, Chloe Smith, said: "Today's announcement is an important step in meeting the government's commitments on environmental tax, and our broader determination to be the greenest government ever. By setting out a clear, usable definition of what a green tax actually is, people will be able to judge us against the Coalition Agreement pledge.
“Indeed, through ambitious policies such as the Carbon Price Floor, this government is already on track to double the proportion of environmental tax revenue by the end of the Parliament. We want a clear approach that delivers a positive environmental impact without adding burdens onto business or households.”
The Office for Budget Responsibility’s predictions for environmental tax revenue can be found in the table below:
| Tax | Actual Revenue Raised 2010/11 | Actual Revenue Raised 2011/12 | Revenue Forecast2 012/13 | Revenue Forecast 2013/14 | Revenue Forecast 2014/15 | Revenue Forecast 2015/16 |
|---|---|---|---|---|---|---|
| Climate Change Levy | £0.7bn | £0.7bn | £0.7bn | £0.7bn | £0.7bn | £0.8bn |
| Aggregates Levy | £0.3bn | £0.3bn | £0.3bn | £0.3bn | £0.3bn | £0.3bn |
| Landfill Tax | £1.1bn | £1.1bn | £1.1bn | £1.2bn | £1.5bn | £1.6bn |
| EU ETS | £0.4bn | £0.3bn | £0.7bn | £1.5bn | £1.6bn | £1.7bn |
| Carbon Reduction Commitment | 0 | £0.7bn | £0.7bn | £0.8bn | £1.0bn | £1.0bn |
| Carbon Price Floor | 0 | 0 | 0 | £0.6bn | £1bn | £1.2bn |
| Total | £2.5bn | £3.1bn | £3.5bn | £5.1bn | £6.1bn | £6.6bn |
| 2010/11 | 2011/12 | 2012/13 | 2013/14 | 2014/15 | 2015/16 | |
|---|---|---|---|---|---|---|
| Total Revenue from Environmental Taxes | £2.5bn | £3.1bn | £3.5bn | £5.1bn | £6.1bn | £6.6bn |
| Total Tax Forecast Receipts | £550.8bn | £570.4bn | £591.5bn | £622.5bn | £658.4bn | £692.0bn |
| Proportion of total tax receipts | 0.5% | 0.5% | 0.6% | 0.8% | 0.9% | 1.0% |
| Environmental Impacts from Budget 2012 announcements by year | ||||||
| Impact from Budget 2012 (already included above) | 0 | 0 | -£15m | +£60m | +£30m | +£30m |
Further information can be found on HM Treasury's website.
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