The warning comes from the UK Environmental Law Association which represents many of the legal firms working for the waste management and local authority sector and is in response to an HMRC consultation.
In March HMRC – HM Revenue & Customs – issued the consultation on whether it made sense to bring illegal waste sites within the scope of the Landfill Tax. At present those dumping waste illegally may escape paying the tax.
HMRC, explaining the rationale for the consultation, gave an example of a case in 2016 where three people were charged for illegally dumping 6,000 tonnes of waste and had avoided the tax. HMRC noted: “The fines levied through environmental legislation totalled £170,000. If the illegally dumped material had been liable to landfill tax, it would have resulted in a tax bill of £500,000, plus a penalty of up to 100% of the tax, and interest.”
UKELA
Now, UKELA has pointed that within the UK, there is already a mechanism under the Proceeds of Crime Act 2002, for removing any pecuniary advantage obtained by illegal waste site operators, including avoidance of tax. And, the lawyers highlight that the Environment Agency currently gets to keep a proportion of any monies recovered through confiscation orders, which can be reinvested in tackling waste crime.
In its consultation documents, HMRC recognises the potential issue of ‘double jeopardy’ where a person cannot be penalised twice for the same offence. It confirms that changes to legislation will have to ensure this does not happen.
“There is concern that funds which may be allocated to HMRC would in effect be diverted away from the Environment Agency.”
Anna Willetts
Slater and Gordon
However, UKELA is concerned that if rules were changed the Agency might end up losing money to tackle waste crime, “if HMRC uses its powers to impose landfill tax on illegal waste site operators”.
Funding
One of the UKELA member lawyers, Anna Willetts, senior associate in the business crime team at Slater and Gordon, told letsrecycle.com: “There is concern that funds which may be allocated to HMRC would in effect be diverted away from the Environment Agency. This may have a negative effect in tackling waste crime as the Environment Agency is viewed by many quarters as the most effective body to deal with waste crime. Removing access to these funds may potentially weaken and undermine its resources to do this.”
In its response, UKELA also asks HMRC to be careful in drafting legislation so that landowners who fall foul of scams, should not face liability.
The association says it is aware of “a number of scams where third parties have persuaded landowners, sometimes for a fee … to take what turns out to be waste onto their land for temporary storage. The person importing the waste then disappears. Examples of such scams include farmers asked to store plastic-wrapped silage bales, which when they arrive turn out to be plastic-wrapped bales of waste instead.”
Related Links
Register for free to comment