Landfill Tax – extending the scope to illegal disposals
At Spring Budget 2017, the government announced its intention to consult on whether to bring illegal waste sites within the scope of Landfill Tax.
Landfill Tax was introduced on 1 October 1996 as a disincentive to landfilling material and to encourage the switch to more environmentally friendly alternatives. Since the introduction of the tax in the UK, landfilling is down more than 60%.
Landfill Tax is due on material disposed of at landfill sites in England, Wales and Northern Ireland which have an environmental permit or licence for waste disposal. The tax is collected from operators or controllers of a landfill site based upon the weight and type of material.
There are two rates of the tax:
- a standard rate (currently £84.40 per tonne); and
- a lower rate (currently £2.65 per tonnes) for the least polluting material.
At Spring Budget 2017, the government introduced changes to the definition of a taxable disposal for Landfill Tax purposes, which will come into effect later in 2017. These changes bring greater clarity and certainty for landfill site operators, putting beyond doubt material that is within the scope of the tax.
Building on these changes, the government announced it would consult on whether to extend the scope of Landfill Tax to disposals of material at sites operating without the appropriate environmental licence or permit. These illegal waste sites operate outside the scope of Landfill Tax making the activity attractive to rogue operators who exploit the disparity of tax treatment to undercut legitimate operators.
One of the Government’s key aims is to support legitimate operators by removing the advantage criminals have in this sector.
This consultation therefore seeks views on whether to extend the scope of Landfill Tax to material disposed of at illegal waste sites. The Government does not want to increase burdens on legitimate operators unnecessarily, and so is seeking views on how it could introduce these changes in the most effective way, without any unfair or unintended outcomes. Responses are invited from any interested parties, including individuals, advisers and representative and professional bodies.
The consultation, whose closing date for comments is 5 May 2017, sets out the reasons for extending the scope of Landfill Tax to material disposed of at illegal waste sites and considers:
- how to define an illegal waste site;
- the criteria for determining a taxable disposal;
- the persons liable for the tax;
- how to quantify the amount of tax due; and
- the Scottish and Welsh governments approach to illegal waste sites.
The government is keen to seeking views from a wide range of stakeholders to establish clear evidence-based rationale for its decisions. It would particularly like to hear from individuals and organisations that may be indirectly or directly affected by illegal waste sites in England and Northern Ireland or have a particular interest in Landfill Tax.
If the government pursues this policy, the earliest any changes would come into force is 1 April 2018.