The lower rate has more than doubled, rising from £4.05 – a 113.6% increase and the largest uplift to the rate in a decade. The standard rate increased by 3.7%.
The change comes after the Government stepped back from more radical structural reforms to the tax that were previously under consideration.
Reeves’ landfill tax rethink
In the Autumn Budget 2025, Chancellor Rachel Reeves confirmed that the government would not proceed with plans to converge the standard and lower rates of landfill tax by 2030.
The Treasury had been exploring a significant overhaul of the system, including the potential abolition of the lower rate entirely.
Additional proposals included removing the qualifying fines regime from April 2027, ending exemptions for quarry backfilling, stabilisers in dredged material and water discounting, and introducing tougher penalties for unauthorised waste sites.
These proposals were driven in part by concerns raised by the Environment Agency about the misclassification of waste, with some operators allegedly describing waste as qualifying for the cheaper lower rate when it should fall under the standard rate.
The suggested reforms aimed to simplify the system and reduce opportunities for abuse.
However, they also prompted strong opposition from across the waste and construction sectors, where stakeholders warned that removing the lower rate could trigger substantial cost increases.
Industry bodies highlighted that such changes could have made key activities – including quarry restoration, infrastructure development and the use of aggregates – financially unviable.
Some exemptions to remain
In response to this feedback, the government has adopted a more cautious approach.
The revised policy confirms the retention of the two-tier landfill tax system, with no move to a single rate.
However, the lower rate will now increase in line with the same cash uplift applied to the standard rate, explaining the sharp rise seen in April 2026.
Several exemptions – including those for quarry backfilling and water discounting – will remain in place. However, the exemption for stabilisers used in dredged material is set to be removed from April 2027.
In an opinion piece for letsrecycle.com, David Pickstone and Anastasia Nourescu of law firm Stewarts said the rollback of more disruptive measures would provide “welcome stability” for operators.
However, they warned that further changes are likely. The government’s intention to review exemptions, modernise compliance frameworks and tighten enforcement against waste misdescription and unauthorised sites suggests that landfill tax policy will remain under active development.
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