Landfill Tax is due on waste disposed of at permitted landfill sites in England, Wales and Northern Ireland. A separate landfill tax was devolved to Scotland in April 2015.
Since its creation, the waste industry has been faced with a number of challenges regarding the interpretation of a taxable disposal, most notably in the Waste Recycling Group Limited case (2008), regarding material put to use as a daily cover or to construct roads within the landfill site, which were held to be not taxable. According to HMRC, this has created additional uncertainty and complexity regarding the application of the tax and in May 2016, the Government announced a consultation to reform the legislation.
As part of the consultation, the Government proposed to amend the criteria so that all material disposed of at a permitted landfill site is taxable, subject to certain exceptions. A set of narrowly defined exceptions would be included, consistent with the activities that are not currently taxable. This approach differs for the current approach which specifies those activities which are subject to the tax.
Following the consultation, the Government now intends to introduce this legislation to implement the proposals within the Finance Bill 2017, with the amendment having effect from Royal Assent or at a day to be appointed by Treasury Order.
This change will directly affect landfill operators and is likely to increase the amount of waste that falls within the scope of the tax.