The latest meeting of the government-industry working group on landfill tax took place in London last week (November 6). Waste sector representatives were joined by officials from Her Majesty’s Revenue & Customs (HMRC) to discuss feedback from a recent consultation on the new LOI system (see letsrecycle.com story).
Under the HMRC proposals, landfill operators will have to determine the presence of non-inert material in a waste load through LOI testing from April 2015.
The method sees waste material heated in laboratory conditions to establish how much mass is lost. Any load containing trommel fines must produce an LOI of 10% or less in order to meet the lower rate of landfill tax – which currently stands at £2.50 per tonne.
Loads that fail to meet the 10% threshold will be charged the full rate of tax, which will increase to £82.60 per tonne from April next year.
The working group is also understood to have discussed a ‘standardised’ temperature to test waste at 430℃. Also under some discussion is a possible 1-2% leeway on the 10% threshold in order to level the playing field between operators.
ESA
Commenting on the latest round of talks, a spokesperson for ESA, which represents the landfill operators, said: “ESA’s objective remains an objective testing regime which enables HMRC to crack down on misclassification of waste fines and provides a level playing field for all operators.
“We understand that ministers continue to be consulted over the proposals, with a view to implementing an LOI testing requirement from April 2015.”
Meanwhile, the United Resource Operators Consortium (UROC) and its members continue to raise concerns that many smaller skip hire operators in the industry are unprepared for the new legislation. They have proposed a 12-month ‘grace period’ that would see the LOI threshold rise to 15% in order to give operators enough time to purchase additional processing plant equipment.
Inconsistency
While HMRC is understood to have already rejected this proposal, it has accepted that a ‘standardised’ LOI testing regime will be required to eliminate inconsistency in samples taken from waste loads.
Under current proposals, landfill operators will be required to perform the test for every 1,000 tonnes received from an individual plant, producing a master ‘composite’ sample of through six or more sub samples taken from different areas of any one load.
However, UROC claims that the LOI from a single load can vary depending on how and where the load is tested, which could mean the difference between a waste operator paying the standard or lower rate of landfill tax.
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Concern
A spokesperson for UROC said: “The biggest concern for UROC members has been the inconsistency in laboratory results which can be the difference of trommel fines passing or failing the test. The differential, as we all know, is more than significant when operators face paying £80 tax as opposed to £2.50. It is in the interests of all concerned to get this right.
“We believe that the sector requires a grace period to enable the new regime to bed in and give enough time to generate capital investment to purchase additional processing plant and equipment.
“If Ministers can appreciate the value that will be added by allowing a grace period in that it will stimulate the economy, further improve recycling rates and quality and prevent the closure of a significant number of sites thus maintaining high levels of employment that the SME waste sector contributes.”
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