Landfill firms behind inert fines move, says HMRC

In a letter to Siobhain McDonagh, Labour MP for Mitcham and Morden, Mike Norgrove CBE, director of Excise, Customs, Stamps and Money, explained that from the HMRCs point of view there had been widespread misunderstanding of the of the Brief, which resulted in waste transfer and landfill site operators raising their prices.

In the letter Mr Norgrove said the lack of clarification prior to publication of the Brief had put some landfill operators at an unfair disadvantage.

He said: As a result of representations made to us it became clear that landfill operators were charging inconsistent and often incorrect rates of tax for transfer fines disposed at their landfill sites, and we were therefore concerned that some operators were being put at an unfair disadvantage.

Mr Norgrovesaid the result of this was the publication of the Brief on May 18 (see letsrecycle.com story).

He explained that a study undertaken by the Environment Agency showed that fines and other residues from waste transfer operations contained variable quantities of organic waste as well as significant quantities of gypsum and asbestos, meaning they would not be eligible for the lower rate of tax.

Impact

Discussing the impact of the Brief, in the letter, Mr Norgrove said: From the discussions HMRC officials held with a number of waste management industry stakeholders it was apparent there had been a widespread misunderstanding of the intention and implications of the Brief, with many waste transfer site operators and landfill operators appearing to have believed that our Brief meant that all waste going from waste transfer stations to landfill should be taxed at the standard rate.

The misunderstanding resulted in sudden increases in the fees waste transfer sites charged their customers The increases were a wholly disproportionate response given that fines represent only a small proportion of skip waste.

Mr Norgrovesaid that HMRC had worked with the Environmental Services Association (ESA) to resolve the misunderstanding.

He said: We have been assured by the ESA that the additional clarification will result in waste transfer sites and landfill sites amending their fees accordingly a major player indicated straight away that they intended to reverse the increase in full.

It is not clear whether the operator mentioned is a landfill or waste transfer operator.

Guidance

On June 1 the Treasury published revised guidance on landfill tax (see letsrecycle.com story) which reiterated the point that if fines are correctly described on waste transfer notes that shows they comply with the 2011 Qualifying Materials Order then the 2.50 rate of tax could be applied.

Mr Norgrovesaid that operators have requested additional guidance on evidential requirements to assist landfill operators and their customers to ensure the correct rate of tax is applied. He said the HMRC is considering this and will circulate some guidance in due course.