Treasury officials are considering the merits of introducing a recognised standard for loss on ignition (LoI) testing, less than two months after the test was introduced, MRW has learned.
The indication from Her Majesty’s Revenue and Customs (HMRC) came in response to complaints from the environmental testing company ESG that the current LoI test was “poorly defined” and could lead to waste producers paying out unfair charges.
The LoI test was introduced on 1 April to determine whether waste resulting from recycling processes, grit and screenings can be eligible for the £2.60/tonne tax rate as opposed to standard landfill tax of £82.60/tonne.
A threshold of 15% is in place for the fines to be eligible for the lower rate for the ‘transitional period’ until April 2016, which will then be reduced to 10%.
ESG quality manager for environmental chemistry Andy Peirce told MRW: “Although HMRC keeps tweaking the test, those parts that aren’t clearly defined may have a significant effect on the results you get.
“This has significant commercial impact on the waste producers and on landfill sites because if the test result falls outside of the limit, landfill tax rises by £80 a tonne.”
Peirce listed crucible size and lack of accuracy of temperature controls for the testing as possible areas that could benefit from clearer definition.
He suggested the reason for these shortcomings could be a lack of consultation between HMRC and companies such as his before the LoI test was introduced.
“The methodology needs to be better regulated and agreed. Of the two laboratories I’m aware of that gave their opinion to HMRC during consultation, one feels that it was promptly ignored.”
A HMRC spokesperson said: “HMRC worked closely with key industry stakeholders to produce an accurate method for determining the level of degradable material within a sample. Initial tests indicate it is reliable.
“We will be keeping it under review and we will be considering the merits of introducing a recognised standard of testing in the near future.”