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Businesses shut as tax hike bites

Campaigners against the landfill tax hike say waste disposal businesses are closing at a rate of four a week and they are warning that a Jubilee weekend protest is growing more likely.

Chair of the Plant and Waste, Recycling Show Richard Hunt told MRW he was under mounting pressure to put 600 skips out on the streets of London this weekend.

Hunt told MRW: “If this Government does not do anything about it very quickly then I’m afraid the pressure that we are being put under by the whole country’s skip industry [will rise].

“They are talking about spoiling the Queen’s Jubilee and that is the last thing we want to do.

“They are putting pressure on us to put at least 600 lorries into London outside the House of Commons this coming weekend. That was just north London, not south or any other parts of the country.”

The comments followed a meeting at Parliament hosted by Labour MP for Mitcham and Morden, Siobhain McDonagh, to discuss the landfill tax issue at which Hunt saidfour businesses were now closing every week and the problem would escalate.

Political pressure is now intensifying on the Government to re-think tax changes which have seen the tax cost of disposing of certain materials increase by a staggering 2,460% overnight.

A Treasury civil servant assured the meeting the issue was being considered “urgently” by ministers. Robin Tasker, who works for economic secretary to the Treasury, Chloe Smith, said he could not “make any promises”.

Attendees expressed “disappointment” there were no representatives from Defra or the Department for Communities & Local Government at the meeting.

Meanwhile, Labour continued to call for a U-turn. Shadow chief secretary to the treasury, Rachel Reeves told the meeting ministers had been caught out “policy making on the hoof” and action was needed.

“It’s not just the waste industry, it’s the wider construction business which is being hammered already by the recession is being hammered again by these additional taxes,” she added.

The change that’s rocked the industry

So-called “inert” fines from trommels and screens (material that is not going to contaminate landfill and does not count towards the EU biodegradable landfill targets) was charged at the lower landfill tax rate of £2.50.

But now merchants will have to pay the same full rate of £64-a-tonne to landfill which is paid for “active” material, including non-inert fines that can be biodegrade and create methane.  

In addition, waste or material used to cover waste in landfill areas before they are capped will also be taxed at the full rate. This had previously been regarded as “engineering material”, such as bund walls and caps.

The move, outlined in a HMRC briefing document published on 18 May, relates to a judgement in the HMRC v Waste Recycling Group (2008) case.  

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