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Crisis summit as landfill tax row rumbles on

Waste firms are to meet Government officials today for further talks on controversial landfill tax guidance after clarifications late last week failed to assure industry leaders.  

Skip hire firms celebrated victory last week after the Treasury told campaigners that the re-issued guidance would result in “landfill sites reversing their fee increases”.

But – 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.   

Now a consortium of small and mid-sized waste and skip firms from across the country will meet officials from Defra and Her Majesty’s Revenue and Customs (HMRC).

Consortium member Mark Bensted, who is managing director of Powerday, said the firms had spoken to operators of materials recovery facilities, waste transfer stations and skips across the country.

He said: “We are disappointed that 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.

“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 ”

On Friday 1 June, 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.”

It added that the Treasury had worked closely with the Environmental Services Association (ESA) “to ensure this message is spread as widely and as quickly as possible” to landfill site operators.

But industry experts expressed caution.

Phil Conran, director at 360 Environmental, said: “This will reverse the construction and demolition (C&D) waste increase but it would seem to state quite clearly that commercial and household waste operators will have to pay the higher rate on fines from their waste.

“While the C&D industry will certainly breathe a sigh of relief, it will still have a big impact on many firms that deal with commercial waste where their pricing had been based on all fines being landfilled at the lower rate.”

Skip operators had threatened to block the streets of London over the Jubilee weekend after the Government announced tax clarifications which have seen the tax cost of disposing of certain materials increase by a staggering 2,460% overnight. 

How the saga began

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 an HMRC briefing that sparked controversy, published on 18 May, appeared to suggest merchants would have to pay the same full rate of £64-a-tonne to landfill which is levied on “active” material, including non-inert fines that can be biodegradable and create methane.  

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

The move related to a judgement in the HMRC v Waste Recycling Group (2008) case.

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