Landfill tax changes come into effect

The standard rate of landfill tax rises from £82.60 to £84.40 per tonne in line with RPI, while the lower rate of tax will increase 5p to £2.65 per tonne.

Scotland – which devolved its landfill tax powers from the UK in April 2015 – is also expected to set its rates in line with the Treasury. But rules which will determine when landfill operators should charge the lower rate of tax on inert material will not be implemented north of the border until October 2016.

The tighter regime, which comes into effect across the rest of the UK today, will require processors to achieve a loss on ignition (LOI) test result of 10% or below in order to qualify for the £2.65 rate of tax rather than the previous 15% threshold.

The 10% LOI is the culmination of years of negotiation between Her Majesty’s Revenue & Customs (HMRC), the Treasury, Environmental Services Association (ESA) and United Resource Operators Consortium (URoc).

However, last week URoc withdrew its support for the April implementation date and called for a delay to the timetable.

It argues that without more consistent testing and a recognised protocol, the new 10% benchmark will “devastate” smaller waste businesses overnight.  Despite this, ESA still claims the threshold is a “generous upper limit”.

Samples

At a Fines Talk conference hosted by the skip association in Liverpool earlier this month, Kirk Bridgewood, technical director of Derwentside Environmental Testing Services (DETS), said that of 1,567 samples taken by his company in the last six months – the mean result had been 6.98% LOI.

And notably, Mr Bridgewood suggested that HMRC test guidelines were more likely to underestimate the amount of organic material in a waste load than by using the standard method (see letsrecycle.com story).

HMRC

Responding to the calls for a delay today, a spokesman for HMRC said that the industry has had “reasonable time to prepare” for the LOI changes since they were announced in the 2014 Budget, adding that the details of the regime were partly developed by representatives from all of the main trade bodies.

HMRC added: “The regime was also developed to enable landfill operators to take the lower of any two test results conducted on the same sample if there is any variance in results.”