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Waste firms write to ministers over landfill tax changes

Pressure is mounting on ministers over controversial landfill tax changes after a coalition of small waste firms urged a re-think and lawyers warned the move would stymie an economic recovery.

Exclusive MRW strap

The firms said the changes – which have seen the tax cost of disposing of certain materials increase by a staggering 2,460% overnight – threatened to kill off a raft of small and medium size disposal outfits.      

Now MRW has learned that 10 firms have written to ministers calling for a re-think on the decision to raise the landfill tax on inert fines from £2.50 to £64 per tonne. Many more are taking up the matter through their MPs.

The letter, seen by MRW, calls for the higher charge to be suspended for six months while a full consultation and transitional arrangements are carried out (see box below).

Addressed to environment secretary Caroline Spelman and communities secretary Eric Pickles, the letter said: “Many jobs at material recovery facilities, transfer stations and related haulage and servicing businesses will be at risk if the financial incentive to maximise recycling and recovery is removed.”

What the waste firms want:

  • The imposition of the higher rate of landfill tax in respect of inert fines suspended for six months.
  • Formal consultation to take place between the industry and all relevant government departments.
  • As part of this consultation exercise, a working group established, with industry representatives and relevant members of the government departments, to discuss and resolve the practical issues of implementing such a change.
  • The possibility of an intermediate tax rate for certain materials to be examined.
  • Transitional arrangements to be developed in order to ‘phase in’ any increase in landfill tax for inert materials. 

Meanwhile, leading lawyers threw their weight behind the argument that the changes could be detrimental to the economy and have an impact well beyond the waste industry.

Kevin Gibbs, director of planning and environmental at law firm DAC Beachcroft, said: “The Treasury has to be looking at how this will impact the economy.

“This may be beneficial to some in the waste industry because it brings clarity to a grey area but this is not beneficial to UK Plc.

“This is not going to be helpful for construction projects. Having a more of a lead-in time may be one way around it.”

David Kerfoot, head of planning and environmental at law firm Aaron and Partners, added that firms challenging the decision through the courts faced an uphill battle. 

Kerfoot said: “There is always the prospect of a challenge. But to judicially review HMRC on the interpretation of its landfill tax regime would be very onerous, in my opinion.”

Large waste firms support move

However, large firms remained supportive of the change, saying it would lead to more money being invested in technology to divert waste from landfill.

A Shanks spokesman told MRW: “Shanks welcomes clarification on this issue and is pleased that HMRC has recognised the inappropriate landfill disposal of this material. 

“The change in the rate of taxation will allow companies like Shanks to invest in treatment facilities which will divert more material from landfill and make more from waste.”

HMRC & Defra respond

An HMRC spokeswoman said: “HMRC responded to concerns expressed by landfill operators that some companies were not paying the right rate of tax and in the process disadvantaging those who paid the correct rate.

“We have addressed this anomaly by issuing fresh guidance to ensure a level playing field for all businesses working in landfill.”

A Defra spokesperson said:“Landfill tax is a matter for the Treasury and HM Revenue & Customs.

“The new guidance from HM Revenue & Customs should not affect firms that can demonstrate that they are processing naturally occurring rock, sub-soil or stones and will encourage the waste industry to ensure they are accurately describing the contents of any load they are sending to landfill.”

Readers' comments (8)

  • Does the Defra spokesperson know what trommel fines are? This is not a duty of care issue but an interpretation of landfill tax legislation that discriminates against all sites regardless of the quality of the trommel fines. For example, trommeling soil and stone to remove the stone would mean that even if the resultant soil was inert it would have to be subject to the higher rate tax if disposed of to landfill. The same material from the site of production would attract the lower rate because it hasn't been through a transfer station. The two regimes do not match up and it is about time Defra and HMRC stopped passing the buck and agreed on definitions that are common to both.

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  • Every year for as long as Landfill tax has been increased and infact when it was introduced, skip companies and transfer stations have increased their prices inline with the rise in tax. The material was then trommelled and the small material (heavy) sent to landfill as cover at only 2.50/tonne tax. It's about time the taxman woke up as it's been going on far too long

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  • If the individuals / persons involved & responsible actually realised & had in depth knowledge of what the 'material' or 'waste' was that they were carrying out this 2460% tax increase on then I as others would have some respect for them, they simply are not involved in way shape or form in the waste & recycling industry & have no knowledge of what they are doing or the dire consequences & impact of their actions, its simply for financial gain by our Government, the perverbal 'rag' has been well & truly rung dry on our industry (And our Country) in relation to tax we pay (Including fuel) and its now dry & tattered believe us...when will politicians start listening to people that matter, the working people that actually keep the cogs of this country turning!

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  • A level playing field is what is needed, how many companies have been shredding waste to mix with the fines? Some companies have been getting away with paying the right rates for their waste streams and now the page has turned they are crying into their back pockets.

    A weekly sample would soon sort out what your trommel fines are full of, then pay the going rate for tipping.

    3 days ago I thought about shutting the gates, now if we all work along the same lines, price the work right, and do the job we set up to do - we can all still trade.


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  • This is going to be very painful for all skip hire firms.
    I think the ones kicking up the most are the people who have been shredding residual waste and getting it in to landfill as cover @ £2.50 per ton saving approx £2000 per artic load sent to landfill and made a fortune in avoiding paying landfill tax
    While others who have invested in picking stations baling equipment etc and tried to recycle as many materials as possible and still ended up with paying landfill tax on non recyclables at the prevailing rate.
    To sum up those who shred have got what was coming to them and dragged the genuine firms who have been recycling to best of their abilities in to this mess.
    Only time will tell who will survive this.

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  • Why do 'Anonymous' people keep stating that waste / skip companies who have shredded their 'waste streams' have been the guilty parties & have 'got what was coming to them'??.....This is nonsense, people such as myself who invested best part of £400K on a shredder did not purchase them so we could tip shredded waste as inert fines!!..the purpose of a shredder is to process / shred / minimize the waste so to reduce the volume of it and reduce primarily transport costs, the secondary benefit of shredding the waste is so the material will pass through a recycling system / picking line more easier.

    I should know a bit about shredding for my organization was the first company in the UK to shred 'C&D' & domestic refuse waste on landfill sites & we were processing up to 600 Ton per day on one site alone, & I can assure all parties / readers of this the reason we researched & eventually carried out the shredding operation for a major UK landfill operator was so to reduce the volume of material entering & being compacted into each cubic metre of space within the landfill cells, thus prolonging the working life of the sites & maximising profits for the landfill summarize shredded waste is still waste!!....not fines or Inert soils!!!

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  • It is clear that HMRC has sought to prevent abuses of the tax system because of the shredding of non-haz waste and mixing it with soil based fines, rather than shredded waste alone being the problem as that is subject to the higher rate. What is not understood by many is that all trommel fines are now subject to the higher rate if they are from a transfer station. Of soil based materials only subsoils benefit from the lower rate. The actual increase in skip prices has not passed the full landfill tax increase on to customers.

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  • Murdo Guy

    This has been hard for us at but manageable..We've learned to cope with it.

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