Her Majesty’s Revenue and Customs (HMRC) is seeking to ‘simplify’ the criteria around which types of waste qualify for landfill tax from April 2017 – in a bid to end ‘uncertainty’ over guidance on the issue.
A consultation, ‘Landfill Tax: improving clarity and certainty for taxpayers’ is seeking views on amending the definition of a ‘taxable disposal of waste’, as well as views on the tax bracket for hazardous waste disposal.
HMRC wants to reassess what waste types are charged under the landfill tax regime in England, Wales and Northern Ireland. Waste companies remain unsure what ‘practical impact’ the proposals could have on landfill disposal, and it is unclear if it could affect the ongoing legal challenges brought against HMRC for repayments on materials for ‘engineering purposes’.
The consultation, which ends in August, was floated in Chancellor George Osborne’s Spring Budget – with a view to adopt the proposals within the Finance Bill from 1 April 2017. In its consultation documents, HMRC notes: “The government is proposing to amend the criteria for determining when Landfill Tax is due so that all material disposed of at a permitted landfill site is taxable, subject to certain exceptions. A set of narrowly defined exceptions will be included, consistent with the activities that are not currently taxable.
“Specified activities which are currently not taxable are listed within the Excise Notice Landfill Tax LFT1: a general guide to landfill tax and replicated at Annex A. We propose to exempt these activities so that they remain not taxable.
“This proposal will differ from the approach adopted in the Prescribed Activities Order which specifies the activities that are subject to the tax. The government believes this will simplify the definition of a taxable disposal and bring any uncertainty to an end, and ensure that new activities are not introduced to undermine the tax.”
Operators sending waste to landfill must pay a standard rate of tax set at £84.40 per tonne, or a lower rate set at £2.65 for ‘the least polluting’ material such as fines. However, there are a number of activities, which are considered as not taxable, including fluff and soft waste used for engineering purposes to cap a landfill cell or in road construction.
The new procedure has been proposed to ensure new activities at landfill sites “are not introduced to undermine the tax” – and to give clarity to operators who continue to challenge the tax system.