The document titled Modernising landfill tax legislation cites last year’s Waste Recycling Group vs. HM Revenue & Customs case as a key driver for this change.
The case debated what constituted a taxable disposal of waste at a landfill site, based on differing interpretations. The case ruled in favour for WRG that material received on a landfill site which is put to use on the site is not taxable.
But the Treasury explained in the document that as of from 1 September most of the waste will be subject to tax.
Use of material for the following purposes constitutes a taxable disposal:
* Daily cover;
* Temporary haul roads;
* Temporary hard standing;
* Cell bunds – not as part of engineering structure;
* Temporary screening bunds; and
* Temporary storage of ashes.
The document states: “The WRG case has demonstrated that landfill tax is not fully in line with current environmental protection regulation and waste industry practice. Review and modernisation should result in greater certainty and clarity for taxpayers.”
The Treasury has also outlined plans to define a number of wastes currently classed as inert waste under the levy and therefore only incur a charge of £2.50 per tonne when landfilled. Instead these wastes would be subject to the full level of tax, which is currently £40 per tonne.
Inert wastes qualify for lower taxes because they do not biodegrade in landfill and there is no risk of pollution to groundwater or surface water.
The Government proposes to change the list of inert wastes that qualify for the lower rate of tax in line with recent developments on what constitutes inert waste from the European legislation.
These wastes include: coal fly ash (pulverised fuel ash), bottom ash, furnaces slags including slag from waste incineration, used foundry sand, gypsum and brine waste.
In an impact assessment accompanying the consultation, the Treasury estimates that this change could cost up to £160 million based on current landfill tax rates.
Overall, the “consultation aims to ensure the continued soundness of the administrative and legislative arrangements that underpin the tax”.
Industry views are sought on the consultation which closes on 24 July.