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Landfill fee increases 'reversed'

Re-issued guidance on the controversial landfill tax changes will result in “landfill sites reversing their fee increases”, according to a Treasury letter seen by MRW.

The news was welcomed by “delighted” skip operators but sector experts warned that firms disposing of certain types of waste would still be paying a higher tax rate.

The Treasury letter came just hours before Her Majesty’s Revenue and Customs published new guidance that it hopes will draw a line under the saga that has plunged the recycling industry into chaos.   

The 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 Phil Conran, director at 360 Environmental, expressed caution.

He 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.

“It is not so much a U-turn but just applying a more sensible definition in relation to C&D fines.”

Environmental Services Association director-general Barry Dennis said: “We welcome HMRC’s further clarification of the rules which apply to landfill tax. In particular, we welcome HMRC’s confirmation that residual materials from waste transfer stations will be liable to the lower rate of tax, where they can be shown to be genuinely inert material, while materials which cannot be shown to be inert will be subject to the standard rate.

“As ESA has said throughout, it is right that the position is clarified by HMRC to ensure a level playing field, and so that the correct rate of landfill tax is applied to all operators.”

The guidance follows skip operators threatening 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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