The Environment Agency (EA) has revealed that £18m-worth of tax was avoided by operators misdescribing waste last year.
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In an interview with MRW, EA deputy director for waste regulation Nicky Cunningham said the agency would soon be issuing a report on tax evasion.
“We investigated misdescription of waste last year, and we found 63 cases that were referred to HMRC for follow-up. These cases accounted for something like 630,000 tonnes of waste which had been misdescribed.
“That’s £18m-worth of tax evaded. It is significant.”
Cunningham added there was a “one-to-ten ratio” in terms of the time taken tracking down tax avoiders and the benefit to the public purse.
“If you want to operate and cut corners at one end or carry out downright criminality at the other end of the spectrum, then there is a profit to be made. It’s largely done through landfill tax evasion.
“We work with HMRC very closely. In fact, we have reciprocal secondment arrangements because landfill tax is a complex area, and so is waste regulation. Sharing our respective knowledge base really helps.”
Landfill tax evasion has also been identified as a major problem in other parts of the UK.
Willie Wilson, waste crime manager for the Scottish Environmental Protection Agency, told MRW: “[The waste sector] is a cash-rich environment and there is opportunity for tax evasion through misclassification of waste.
“There is a significant tax burden in terms of the standard rate of landfill tax. If you can change the identifying features of the material through falsification or some agreement, you can avoid that.
Derek Williamson, head of the enforcement branch Northern Ireland Environment Agency, told MRW that misclassification of waste as one of his biggest challenges.
“It is exceptionally difficult to get any coherent detail understanding around this. There are so many layers involved in waste movements and shipments.
”From waste producers to carriers, hauliers and transport, waste brokers, MRFs and so on – there are many veneers of legitimacy around a lot of the regulated and unregulated business. It is very resource-intensive to uncover.”
Figures released in November 2016 revealed a 13 million tonne gap between the amount of material going to landfill according to the EA and the amount according to HMRC landfill tax receipts.