A skip firm has hit out at established Government policy to use increasing landfill taxes on businesses to subsidise lower corporation taxes. Basingstoke Skip Hire director Laurie Mercer told MRW she was concerned about the rising tax undermining her business, and that of others in the industry. She said it was unfair that revenue raised through landfill taxes was used to lower corporation tax.
In the Budget 2007, the Government said that rising landfill tax collected from businesses would be recycled to business through the reductions in corporation tax.
Call for reductions
But referring to the current economic climate, Mercer said: Why should we be penalised? This tax is a tax on construction users of waste management companies. I agree with the point of reducing waste to landfill. But at the end of last year we were paying to get rid of stuff because no one would buy it.
I think the Government should reduce it [the landfill tax] or drop it this year. That would help. The tax rise in April is going to finish so many people off and I feel our industry is being taxed unfairly compared to other businesses.
I am not arguing with the case for a landfill tax because it has worked by increasing recycling rates. But I do not agree with the increases, it will be £40 a tonne this year.
But Environmental Services Association chief executive Dirk Hazell disagreed saying: ESA has always supported an increase in the landfill tax because we support the sustainability agenda. We want the prices of recycling and energy recovery to broadly compete with landfill.
He said ESA agreed with off-setting landfill taxes by lowering corporation tax and referred back to when the landfill tax was offset against lower employer NI contributions. Increases in landfill tax should be fiscally neutral, he said.
But he added: We would like to see clarity in the 2009 Budget on where the landfill tax is going to go. Wed also like a statement of long term intention from the Government.