HM Treasury and HMRC have launched a joint consultation document on changes to Landfill Tax (LFT). LFT is widely credited with creating a major shift in behaviour towards recycling and it is said that over the last five years, 33.8 million tonnes of rubbish which would otherwise have been sent to landfill has been recycled saving £1.5Bn.

The aim of the tax is to encourage the disposal of less waste; to recover more value from waste through recycling and composting, and to stimulate moves to more environmentally friendly waste management methods. It is seen as the key driver of the UK’s move away from using landfill disposal and the main hope of meeting European waste targets under the Landfill Directive in 2010, 2013 and 2020.

However, concern is now being expressed at the proposed changes.

It has been pointed our that whilst the increase in tax is mooted, together with a review of the materials likely to attract the higher rate of tax, there is no indication as to how the tax raised will be fed back into the industry and local authorities.

There is concern that Landfill Tax which was originally said to be “tax neutral” and used to fund reductions in NIC for businesses will become just another stealth tax, like road tax. This is echoed by the Local Government Association, which is urging the government to ring fence the tax receipts, so that they can be applied to provide improved recycling facilities.

Suspicion that the proposed changes are more related to “tax take” than achieving waste targets, may be fuelled by the consultation paper itself, which refers in some detail to the recent Court of Appeal decision which held that certain uses of materials at landfill sites were exempt from LFT, and the legislative changes which are now required to reverse this decision.

DMH Stallard will be responding to the Consultation Paper reflecting the views of attendees to our seminar on 26th June, when the key note speaker will be Charles Hendry, Shadow Minister for Energy.

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