From tomorrow (April 1), the standard rate of landfill tax will rise from £80 to £82.60 per tonne, while the lower rate will increase from £2.50 to £2.60 per tonne.
And, tomorrow will also see landfill tax powers officially devolved to Scotland – as well as the introduction of mandatory loss on ignition tests for landfill operators in the rest of the UK.
The LOI regime – which has been enshrined in the Landfill Tax (Qualifying Fines) Order 2015 – is expected to help determine whether processors should be charged a standard or lower rate of tax.
It will mean landfill operators will have to perform LOI tests on every 1,000 tonnes of waste received from an individual processor, heating the sample in laboratory conditions to calculate how much non-inert material is present (see letsrecycle.com story).
Waste loads must achieve a loss on ignition of 10% or less in order to attract the £2.60 rate of tax. However, Her Majesty’s Revenue & Customs (HMRC) has granted a transitional period until April 2016 in which processors will only have to achieve 15% to meet the lower tax threshold.
And, in guidance published earlier this month, HMRC confirmed that mixed waste inputs would be able to qualify for the lower rate of tax – a compromise that many smaller operators in the industry had been hoping for.
Working Group
The proposals have been fleshed out over two years of working group meetings attended by HMRC and Treasury officials alongside waste industry representatives including the Environmental Services Association and the United Resource Operators Consortium (UROC).
Commenting on introduction of the Qualifying Fines Order this week, Sam Corp, head of regulations at ESA, said an objective LOI test would “go a long way” to preventing the misclassification of waste.
He said: “The purpose of the LOI regime was to help provide a level playing field for all operators – both those producing and those disposing of waste fines – and to prevent misclassification of waste fines either deliberately or otherwise. It is therefore vital that HMRC is both consistent and robust in its enforcement to ensure that the new requirements are properly implemented by all parties.
“We will continue to engage closely with HMRC to help ensure the implementation of the regime is as smooth as possible.”
Jenny Watts of UROC added: “UROC is delighted that after much hard work with HMRC the position regarding trommel fines disposal at the lower rate tax has now been clarified. Uroc applauds that HMRC recognised the importance of having a transitionary period of 12 months at 15% LOI.”
Scotland
Meanwhile, waste operators north of the border are anticipating the launch of the Scottish Landfill Tax tomorrow – one of the first such independent taxation powers for Scotland in over 300 years.
Earlier this year, the Scottish Parliament confirmed rates and a water discount would remain in line with the rest of the UK at least until April 2016. However, an LOI regime will not be included initially (see letsrecycle.com story).
Robin Stevenson, managing director of Scottish waste and recycling firm William Tracey Group, said: “We welcome the transfer of powers and the decision to keep rates broadly level with the rest of the UK to avoid the cross-border movement of waste for cheaper disposal.
“The ability to administrate over our own taxes gives us the opportunity to ensure that the proceeds of Landfill Tax are used to directly support the development of a more resource efficient Scottish economy and our ambitious 2025 targets.”
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