HMRC landfill data charts effect of fines ruling

The statistics, which cover the 2011/12 financial year, were contained in HMRCs Landfill Tax Bulletin last month. They show that despite an overall reduction in the amount of waste sent to landfill, the amount taxed at the higher rate of rose sharply, by around 300,000 tonnes, during the third quarter of 2012.

This was due to a ruling in May 2012, in which HMRC said that fines from recycling processes, grit and screenings would no longer be eligible for the lower 2.50 rate of landfill tax applied to inert material, and must be charged the full rate.

And, the latest figures show that following the ruling on landfill tax there was a decline in the amount of landfill tax charged at the lower rate, with around 3,327,000 tonnes landfilled in the first quarter of 2012, compared to around 2,925,000 tonnes in the final quarter of the year.

Waste and recycling firms expressed particular concern over the rule change, with a number arguing that it would result in hundreds of thousands of pounds of extra costs, and that it could act as a disincentive to recycling (see letsrecycle.com story).

Ruling

The changes followed a landmark case in 2008 involving HMRC v Waste Recycling Group (WRG). In the case, the court ruled that inert material brought onto site by WRG and used for temporary structures, such as daily landfill cover and site engineering purposes, was not liable for taxation as it had not been disposed of. HMRC was ordered to pay back the tax to WRG, which paved the way for 300 million of further repayments (see letsrecycle.com story).

HMRC said that some operators had sought to claim back tax paid on material used as a top layer for landfill cells, but decided that this material should be liable to the standard rate of tax as the waste material is disposed with the intention of discarding it.

The standard rate of landfill tax rate rose to 72 per tonne in April 2013 and is set to rise further to 80 per tonne in 2014, although it is not yet known if it will escalate further beyond 2015 (see letsrecycle.com story).