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New landfill tax measures expected to raise £145m

2000 landfill vehicle

New measures that will bring illegal waste sites into the scope of landfill tax are expected to raise £145m in the five years following implementation, MPs have been told.  

Mel Stride, financial secretary to the Treasury and paymaster general, told a Public Bill Committee meeting on the Finance (No. 2) Bill that the Office of Budget Responsibility had assessed the revenue impact of the landfill tax changes.

Stride said: “£145m is expected over the five years following implementation. Those impacts were assessed with the full support of the waste industry and after further contributions from the Environment Agency (EA).”

Peter Dowd, shadow chief secretary to the Treasury, said the Government’s own assessment found that HMRC was not properly resourced to deal with the administrative “burden” of the new tax rules. He said: “I have heard that complaint over and over.”

Dowd warned that administrative costs could rise to around £600,000. He also asked how many additional staff HMRC planned to recruit. 

Stride referred to measures announced in the Budget, that it would provide funding for additional HMRC staff to enforce the measure, and that an additional £30m was being invested in the EA in England “to enable the agency to tackle the illegal waste sites as well as the misdescription of waste and illegal exports”.

The committee voted against a second reading of a proposed new clause in the bill requiring that the chancellor commissions and presents to the House of Commons a report on the effects of the landfill tax changes made within a year of the Act being passed.

Currently at committee stage, the bill extends the scope of landfill tax to disposals made at sites that do not have an environmental permit, from 1 April 2018. This is designed to clamp down on illegal operators, to prevent them from profiting by avoiding landfill tax.

Alongside this, the Government is amending the definition of a taxable disposal.

Stride told the committee: “In order to address the primary concern raised by stakeholders during the consultation, safeguards have been put in place to ensure that any genuinely innocent parties will not be liable for the tax.

”The clause will give industry certainty about what constitutes a taxable disposal. Currently, material is considered to be waste if certain criteria apply.

”The changes made by this clause will remove the waste criteria; instead, all material disposed of at a landfill site will be treated as taxable waste unless it is specifically covered by an exception.

”To simplify the system further, we are also removing the requirement to notify HMRC of restoration activities undertaken at a landfill site. These changes will support the legitimate waste management industry by simplifying the tax system and providing clarity for landfill operators.”

Readers' comments (1)

  • By their very nature illegal waste sites operate undetected, and the perpetrator either goes bust or disappears, pocketing the 'gate fee'.

    Given that they already incur the risks of fines and imprisonment I can't see this tax measure will make any difference

    Any landowner that sub-lets needs to police any waste activity on behalf of the EA or risk the consequences

    It is indicative of HMRC's wider interest in waste activity and actions on landfill tax interpretation on permitted sites nonetheless

    Unsuitable or offensive? Report this comment

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