Landfill tax clarification is ‘shambles’
Clarification by Whitehall of controversial landfill tax (LFT) changes has been labelled a “shambles” by Labour and done little to defuse anger within the waste industry.
After the announcement on Friday (1 June), Labour MPs accused the Government of an embarrassing U-turn – but now admit they jumped the gun and are calling for fresh changes.
Meanwhile, MRW understands no resolution was reached at a crisis meeting between waste firms and Government officials on Wednesday – although official confirmation has yet to be provided by either side.
Labour backbencher, Siobhain McDonagh, who has been campaigning on the issue, told MRW: “Progress has been made but not enough. The firms involved face complete chaos. I am told that none of the landfill sites has issued their price lists.
“There needs to be a clarification of the clarification.”
McDonagh plans to raise the matter in the House of Commons while Lord Kennedy (Lab) is due to raise the matter in the Lords next week. Kennedy told MRW last week’s clarification amounted to nothing more than “weaselled words”.
“It’s a complete shambles,” he said, “I am shocked the Government does not understand the impact that this is having on the industry.”
Events surrounding Her Majesty’s Revenue and Customs publishing a “clarification” to the rules followed a confusing narrative.
Skip hire firms initially celebrated victory after the Treasury told campaigners that the re-issued guidance would result in “landfill sites reversing their fee increases”.
A Treasury letter, sent to campaigners by Robin Tasker, private secretary to economic secretary Chloe Smith, said: “We have been assured by the industry that the clarification [HMRC guidance] will result in waste transfer sites and landfill sites reversing their fee increases.”
But their joy was short-lived.
As reported by MRW, firms disposing of certain types of waste will still pay a far higher tax rate as a result of the guidance, and fears remain that businesses will go under.
The consortium of small and mid-sized waste and skip firms from across the country who met the officials from Defra and HMRC this week is led by Mark Bensted, who is managing director of Powerday.
He said members had spoken to operators of materials recovery facilities, waste transfer stations and skips across the country and were disappointed the clarification did not address two key issues.
“Firstly, trommel fines, which are clean and inert, are still being charged at the top rate of landfill tax and, secondly, the complete lack of consultation with the industry about the changes,” Bensted said.
“We are asking that Government re-consider the status of clean, inert trommell fines and that they be brought inside the definition of materials described within the Landfill Tax (Qualifying Material) Order 2011.
“This is not about defending sham recyclers. There are companies, big and small, who have invested in equipment to maximise recycling. Part of that process creates clean inert fines.”