The recycling sector is currently being hit hard in the pocket by the Government. The valuation service has been instructed to go out and examine all organic treatment facilities, indeed all recycling facilities, and re-assess what rates these sites should be paying.
Charlie Trousdell is managing director of TJ Composting and chairman of the Association for Organics Recycling The somewhat antiquated rating system is based on size of building and rental values, essentially on the basis if you are say M&S in Oxford Street you will pay a lot more rates than Fred's Sweets in, say, Bognor Regis. This is not unreasonable on the basis that rates are simply a tax on business, if you are in a better trading position you pay more.
Clearly this works for retail and probably office space, however in terms of recycling whether it be metals, plastic or organics it seems unreasonable to have to pay based largely on infrastructure, given that to process waste and turn it into a product requires a fair amount of space. And not only space – to ensure best environmental practice buildings and associated technical equipment are required.
Fundamentally within the organic sector, if you have a simple open windrow site you will be paying something like £35,000 anually on the basis of a typical 25,000 tonne-a-year site yet once you start making improvements by say building IVC or AD this could easily rise to £150,000 or more, purely on the basis that the rates are based on buildings and plant. These costs are likely to increase even more once the current review has finished.
The other major issue is that once the valuation service has come up with their potentially sky high figures for a particular site, one has to pay that regardless of throughput. Given that rates are just another tax on business surely it would be better to pay based on input tonnages. This would be very easy to set up and would tie in with waste returns.
Probably a flat rate of £1 per tonne would be fair regardless of technology so an open windrow site would pay the same as a state-of-the-art AD plant. Given everyone has to complete waste returns (exemptions will more or less cease to exist in 2010) it should be easy to collect the tax, so on the basis of some 4 million tonnes being processed the government gets £4million.
Given that government wants to see organic material diverted from landfill and the majority of tonnage is from local authorities, why does government want to tax itself? Clearly on current rules for an IVC or AD plant an operator could well end up paying the equivalent of £6 per tonne of inputs on rates, they pass it back to the authority and it puts up local taxes making government even more unpopular!
This is a really serious issue for our sector, we are in danger of being taxed to death and we do need a different system, most importantly we need a level playing field and the current system is a clear disincentive to investment in developing the best type of plant and is certainly poor value for the individual rate payer.
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