18 February 2015 by Tom Goulding

LOI testing details fleshed out in draft landfill tax bill

Draft legislation outlining the introduction of mandatory loss-on ignition testing for landfill operators has been published by Her Majesty’s Revenue & Customs (HMRC) today (February 18).

The Landfill Tax (Amendment) Regulations 2015 will come into effect from April 1 this year and makes provision for LOI testing in the UK.

HMRC has fleshed out the details of LOI testing ahead of new regulations from April 2015

HMRC has fleshed out the details of LOI testing ahead of new regulations from April 2015

It is hoped the LOI test will demonstrate whether waste fines should attract a standard or lower rate of landfill tax – which from April will stand at £82.60 and £2.60 per tonne respectively.

Historically, trommel fines material sent to landfill has attracted the lower rate of tax, but many in the industry have expressed concern that the system is open to exploitation by unscrupulous waste firms.

Under the new regime, a waste sample is heated in laboratory conditions to calculate how much non-inert material is present. Customers must ensure the load has an LOI of 10% or less in order to be considered eligible for the lower rate of tax.

Her Majesty’s Revenue & Customs (HMRC) has accepted a 12-month transitional period in which some waste processors will only have to produce an LOI of 15% in order to meet the lower tax threshold (see letsrecycle.com story).


The draft legislation includes guidance for landfill operators on how and when they should send waste loads for sampling.

Landfill operators will have to perform LOI tests for every 1,000 tonnes of waste received from an individual processor who is ‘clearly and consistently’ producing qualifying fines every six months. These samples will have to achieve an LOI of 8% or less (12% during the transitional period).

However, if a pre-acceptance check indicates a waste processor is producing fines with ‘some variability’ the landfill operator will have to test one load from every 500 tonnes received – or every three months. These samples will have to achieve an LOI of 10% or less, or between 12-15% during the first 12 months.

And finally, landfill operators must test every load from processors where pre-acceptance checks indicate inconsistent fines. These will need to achieve an LOI of 10%, or 15% during the first year.

Other factors identified by HMRC which would warrant an LOI test include waste that is atypical from what is normally expected from a customer, contamination identified by visual inspections and a customer who disposes of fewer than 1,000 tonnes of fines over a period of six months.


HMRC also reserves the right to request a representative sample of fines is taken from a waste load if mistake or fraud is suspected – at a cost to the operator. In these circumstances, the result may determine the liability to pay landfill tax.

The guidance dictates that samples must be representative of the whole waste load, with samples taken from the top, middle and bottom as well as a master or composite taken from at least six more places across the quantity of fines. Sub samples must be selected at random.

The 1kg sample must be air-dried until ‘constant mass’ is achieved. A 100g sub-sample is then ‘coned and quartered’ before being grinded to a particle size of 2mm or less.

HMRC has also confirmed changes in the draft legislation which will see waste fines retested if the first LOI result is no more than 0.5% above the threshold for eligibility.

In such circumstances, if the retest result is within the LOI threshold, processors may treat this as the test result for determining liability to landfill tax.


A memorandum published by HMRC reads: “It will be necessary for these Regulations to come into effect fewer than 21 days after they have been laid. The government announced at Autumn Statement that the new system of testing of waste fines would be introduced with effect from 1 April 2015 and there is considerable pressure in the industry for this to happen.”


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