HMRC has published further clarification on the changes to the landfill tax after a ‘misunderstanding’ of the original brief led to angry protests from waste disposal companies.
The tax, issued on 18 May, saw increases in the rates at which fines and material used to cover waste in landfill cells (before they are capped) were charged. The changes to the landfill tax angered many in the waste disposal companies who believed that they would be seeing a rise in the tax on inert waste from £2.50 a tonne to £64 a tonne. This led to outcry in the industry as many companies were left unable to cope with the 2460 per cent increase in tax that caused panic and saw the cost of waste transfers rise rapidly.
However, HMRC’s clarification published on 1 June seeks to reassure that if fines can be shown to comply with the Landfill Tax (Qualifying Material) Order 2011 (SI 2011/1017) (‘the 2011 Order') that lists materials at £2.50 a tonne, this rate will still apply.
“Feedback from the industry suggests that there has been some misunderstanding… and that some businesses had concluded that all material going from waste transfer sites to landfill would now automatically be liable to the standard rate”, states the brief. “Now, as before, the rate of Landfill Tax will depend on whether the materials are as listed within the 2011 Order, meet the relevant conditions and can be demonstrated as such with the appropriate evidence.” If these requirements are met, waste will be charged at the lower rate of £2.50 a tonne, otherwise the higher rate of £64 a tonne applies.
The brief clarifies the main changes to the tax:
- Materials within the reverse or top fluff layer that are listed in the 2011 Order, and can be thus evidenced, would be charged at £2.50 a tonne. Any material that is not listed in the Order will be charged at £64 a tonne.
- Fines listed in the 2011 Order and can be thus evidenced, will be charged £2.50 a tonne. Any fines that are in any way contaminated (i.e from asbestos, metal, wood, plastic or chemical contaminants) or cannot be evidenced to be in compliance with the 2011 Order, would be charged at the higher rate of £64 a tonne.
- Materials from waste transfer stations and from recovery facilities that are sent to landfill will be charged £2.50 a tonne if there is evidence that they comply to the 2011 Order, otherwise they will be charged £64 a tonne.
The brief goes on to clarify that unless materials are listed in the 2011 Order, they would “as has always been the case, be liable for the standard rate of Landfill Tax if disposed to landfill.”
HMRC goes on to warn that they shall make assessments ensuring landfill site operators pay the correct amount of tax, going to litigation and charging penalities “if necessary”.
HMRC’s landfill tax is part of the government’s commitment to see a ‘zero waste’ economy and is part of the UK’s obligation to the EU Landfill Directive, to reduce the amount of biodegradable waste sent to landfill to 50 per cent of 1995 levels by 2013 and to 35 per cent of 1995 levels by 2020.
The full clarification brief can be read on HMRC website.
Get our weekly digest
resource.co article ai
How will the government and DMOs address the challenges of including glass in DRS while ensuring a level playing field across the UK?
There's no easy solution to include glass in the DRS while maintaining a level playing field. Potential approaches include a phased introduction of glass, potentially with higher deposits to reflect its logistical challenges. The government and DMOs could incentivise innovation in glass packaging design and subsidise dedicated return points for glass-handling. Exemptions for smaller businesses unable to handle glass might also be necessary. Any successful solution will likely blend several approaches. It must address the differing priorities of devolved administrations, balance environmental benefits with logistical and cost implications, and be supported by robust consumer education campaigns emphasizing the importance of glass recycling.