OPINION: Landfill tax turns on a deceptively simple concept: a charge arises when there is a “taxable disposal”. But what counts as a disposal? The legislation offers little by way of a clear definition, and the case law is of limited assistance, as much of it considers earlier versions of the regime. In practice, operators are left to grapple with a fundamental question: when can it be said that waste has been disposed of?
The recent decision of the First-tier Tribunal (Tax Chamber) (the “Tribunal”) in J Nuttall & North Killingholme Storage Limited v HMRC [2026] UKFTT 674 (TC) tackles that question. While the case concerned a long-standing stockpile of refuse-derived fuel (“RDF”), the underlying question was broader: can there be a “disposal” where nothing happens to the waste itself, and the only change is in the legal framework surrounding it?
The Tribunal’s judgment offers some much-needed clarity. It is a reminder that identifying a disposal is not a formal exercise, and the answer will depend on what has happened to the material, not simply on changes in its legal status.
The law
Landfill tax is charged on a “taxable disposal”, as set out in Part III of the Finance Act 1996. In broad terms, a disposal occurs where material is disposed of on or under the surface of land, either at a landfill site or at a site requiring an environmental permit or licence. Reforms introduced in 2018 significantly extended the scope of the regime, bringing within charge disposals at unauthorised sites. However, despite this broad framework, the legislation does not provide a comprehensive definition of “disposal”.
Historically, the position was more straightforward. As originally enacted, the legislation required a disposal to involve an intention to discard the material. That requirement has since been removed, reflecting a shift towards a wider and more objective concept of disposal. In particular, the extension to unauthorised sites was aimed at addressing rogue operators seeking to avoid landfill tax by operating outside the permitting regime.
HMRC’s approach has been to interpret “disposal” broadly, arguing that it can include situations where material is effectively abandoned at a site, even where nothing is actively done to “get rid” of it. While this tension may often arise in practice, the Tribunal recently considered this issue for the first time.
The Tribunal’s decision
The case arose from the storage of a large quantity of RDF at a site in Lincolnshire. The material had been delivered between 2011 and 2012 under a contract pursuant to which the taxpayer provided storage services to a third-party waste operator. Under that arrangement, the RDF was to be stored on a temporary basis before export for use in energy generation, with the third party remaining responsible for its removal.
In practice, the material was never removed as agreed. Despite repeated assurances, the company responsible failed to arrange onward processing and ultimately became insolvent and was dissolved. As a result, the RDF remained on site, with the taxpayer left to deal with its ongoing presence despite not owning it. The taxpayer continued to engage with the Environment Agency, pressing for removal, managing the material and ensuring it did not pose an environmental risk.
In 2017, the company holding the environmental permit for the site was dissolved, largely due to debts owed to it by the counterparty. The RDF remained at the site, but there was no longer a permit authorising its storage. HMRC treated that moment as giving rise to a taxable disposal, arguing that the material had effectively been abandoned once the permit lapsed.
The Tribunal rejected that analysis. While it accepted that, following the 2018 reforms, a disposal no longer depends on an intention to discard, it clarified that the concept must be assessed by reference to the facts as a whole. Instead of focusing on a single trigger, such as the loss of the permit, the Tribunal considered the circumstances as a whole, including the parties’ rights, responsibilities and conduct in relation to the material.
On that basis, the Tribunal found that there had been no disposal at the point identified by HMRC. The RDF had originally been brought to the site for temporary storage, and there was never any intention for it to remain permanently. The taxpayer had made sustained efforts to secure its removal and continued to manage it responsibly. There was no change in the physical state or location of the material at the time the permit lapsed and no act that could be said to amount to “getting rid” of it.
Although a disposal may occur in the absence of a physical act, the Tribunal emphasised that this requires a realistic assessment of what has happened in substance. In this case, the mere loss of a permit was not enough. Looking at the position in the round, the Tribunal concluded that the material had not been disposed of, and the assessment was therefore set aside.
Implications for waste operators
The decision confirms that landfill tax charges are not triggered simply by changes in legal status, such as the loss of a permit or the dissolution of a company. The question of whether there has been a “disposal” must be assessed in the round.
For waste management operators, the Tribunal’s approach highlights the importance of evidence. It will be important to show that the material was held on a temporary basis, that responsibility for its removal lay elsewhere and that active steps were taken to secure its removal. Ongoing management of the site and engagement with regulators may also avoid any suggestion that the material has been discarded or “got rid of”.
At the same time, the decision does not narrow the scope of the regime more generally. A disposal can still arise without physical movement of the waste, and different facts may lead to a different outcome, particularly where material is left without any realistic prospect of removal.
Stewarts acted for the taxpayer in this appeal.
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