Treasury predicts landfill tax take rise
The amount of landfill tax the Treasury forecasts to collect will rise £100m between 2014/15 and 2015/16 despite no corresponding rise in the chargeable rate, according to official projections.
Forecasts used by the Treasury said landfill tax revenue will rise from £1.5bn in 2014/15 to £1.6bn in 2015/16 (see first box below) despite the annual scheduled increases in the tax set to finish in April 2014.
Industry chiefs have called for an explanation for the increase, which was included in a Office for Budget Responsibility (OBR) forecast.
They said while the rise in landfill tax revenues between now and 2014 was down to the chargeable rate increasing from £64-a-tonne in 2012 to £80-a-tonne by April 2014, the increase between 2014/15 and 2015/16 was “surprising”.
Environmental Services Association head of policy Matthew Farrow said there was a possible explanation that did not involve a fresh increase in the tax beyond 2014.
He said: “The only explanation I can think of is that the Treasury are forecasting a strong economic recovery by then.
“This would mean the recent fall in business waste tonnages could be reversed and some of that waste could end up in landfill.”
Farrow added that the years beyond that could see an “interesting debate” because revenues raised through landfill tax could drop off.
| Year | 2011/12 actual | 2012/13 forecast | 2013/14 forecast | 2014/15 forecast | 2015/16 |
| Landfill tax | £1.1bn | £1.1bn | £1.2bn | £1.5bn | £1.6bn |
The figures came as the Treasury announced it expected the proportion of revenue from environmental taxes to double by 2015-16, based on the OBR calculations.
Landfill tax is classed as an environmental tax alongside Climate Change Levy, Aggregates Levy, EU Emissions Trading System, Carbon Reduction Commitment Energy Efficiency Scheme and Carbon Price Support.
Economic Secretary to the Treasury Chloe Smith said: “Today’s announcement is an important step in meeting the Government’s commitments on environmental tax, and our broader determination to be the greenest Government ever.”
Revenue from all environmental taxes
| Raised 2010/11 | Raised 2011/12 | Forecast 2012/13 | Forecast 2013/14 | Forecast 2014/15 | Forecast 2015/16 | |
| Climate Change Levy | £0.7bn | £0.7bn | £0.7bn | £0.7bn | £0.7bn | £0.8bn |
| Aggregates Levy | £0.3bn | £0.3bn | £0.3bn | £0.3bn | £0.3bn | £0.3bn |
| Landfill Tax | £1.1bn | £1.1bn | £1.1bn | £1.2bn | £1.5bn | £1.6bn |
| EU ETS | £0.4bn | £0.3bn | £0.7bn | £1.5bn | £1.6bn | £1.7bn |
| Carbon Reduction Commitment | 0 | £0.7bn | £0.7bn | £0.8bn | £1.0bn | £1.0bn |
| Carbon Price Floor | 0 | 0 | 0 | £0.6bn | £1bn | £1.2bn |
| Total | £2.5bn | £3.1bn | £3.5bn | £5.1bn | £6.1bn | £6.6bn |
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