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Industry braced for fresh landfill guidance

A third statement on trommel fines could be published as early as today (18 June) as tax officials try to resolve the controversial landfill tax dispute.

The statement is expected to clarify that trommel fines which fall inside the conditions set in the Landfill Tax (Qualifying Material) Order 2011 should be accepted at the lower rate, according to industry figures.

The news follows a meeting on 15 June between Government officials and around 25 industry leaders.

Jennifer Watts, a spokeswoman for United Resource Operators Consortium (UROC), who attended the meeting said industry groups had given to feedback to Her Majesty’s Revenue and Customs (HMRC) and awaited its statement.

Watts told MRW: “After HMRC’s clarification on 18 May, landfill site operators thought all trommel fines should be charged at the higher rate. This new guidance should clarify that landfill sites can take in trommel fines which fall under the Order at the lower landfill tax rate.”

Despite various attempts to clarify the situation, market insiders have told MRW that landfill site operators continue to charge the higher rate of landfill tax for trommel fines, regardless of their composition - this is the nub of where the protracted saga began (see box).

The 15 June meeting, attended by the Chartered Institution of Wastes Management, the Environmental Services Association and officials from HMRC and Defra, was designed to clear up the situation.

UROC is a new trade body set up to represent small and medium sized businesses in the skip and waste industry following concerns the ESA was not representing them sufficiently and was more interested in looking after its larger members, such as SITA and Veolia.

Watts said SMEs in the sector had “needed a voice” and she hoped UROC and ESA could have a “complementary” relationship.  

A HMRC spokesman said industry representatives confirmed that the further guidance issued on 1 June had “largely removed the uncertainty that many operators had experienced” - but industry insiders insist problems still remain.

The HMRC spokesman added: “The purpose of HMRC’s guidance – to level the playing field across the industry – received widespread support at the meeting from stakeholders across the sectors. Previously, those parts of the industry whose prices were based on the correct tax treatment had been undercut by others not applying the correct rate of tax.

“HMRC is continuing to work closely with the industry to understand the impact and to provide assistance where possible.

“A direct dial telephone line (0161 827 0233) is available for anyone with a query on this issue.”

Third time lucky?

  • 18 May: HMRC publishes Revenue & Customs Brief 15/12 Landfill Tax: material used on a landfill site; and classification of waste
  • 1 June: HMRC publishes Revenue & Customs Brief 18/12 Landfill tax: further clarification on Revenue & Customs Brief 15/12
  • 12 June: HMRC informs McDonagh it will publish guidance on “evidential requirements” in due course.  

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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