As part of its Landfill Tax Compliance Strategy and following a public consultation last year, the Government has brought forward draft legislation amending the Landfill Tax Regulations 1996 (the "1996 Regulations"), which extends the scope of Landfill Tax to sites operating without the appropriate environmental licence or permit. The proposed changes will apply to waste disposed of at landfill and non-landfill sites in Northern Ireland from 1 April 2018.

What is Landfill Tax?

Landfill Tax was introduced in October 1996 to discourage landfilling and to promote environmentally friendly waste disposal practices. It is payable on material disposed of at landfill sites in England, Wales and Northern Ireland. At present, the standard rate is £86.10 per tonne. The current lower rate stands at £2.70 per tonne.

Who is currently liable to Landfill Tax?

Landfill tax is collected from operators or controllers of a landfill site and is based on the weight and type of the material.

What about Illegal Landfill Sites?

Under the 1996 Regulations, Landfill Tax does not apply to disposals at unlicensed/unpermitted sites. Consequently, rogue operators can dispose of waste illegally and undercut legitimate operators. Even where the Northern Ireland Environment Agency has successfully imposed fines for regulatory breaches, they often do not match the profits derived from the unlawful activity. The draft legislation therefore aims to remove the advantage criminals have in the waste sector.

What are the main changes in the draft legislation?

The Government has published a suite of draft secondary legislation, including the Landfill Tax (Amendment) Regulations 2018 and the Landfill Tax (Disposal of Material) Order 2018, which are due to come into force on 1 April 2018. Collectively, the draft legislation amends the 1996 Regulations by extending the liability to Landfill Tax to places other than landfill sites.

HMRC will be responsible for administering and collecting the tax. The tax will apply to licensed/permitted operators and unlicensed/unpermitted operators not deemed exempt by the Department of the Environment, Agriculture and Rural Affairs ("DEARA"). If the permit or license holder has no direct involvement in a site's operation, the tax will be imposed on the controller of the site.

The draft legislation also makes changes to requirements concerning the commencement of taxable activities at non-landfill sites, the regulation of such activities, record-keeping and weighing of material at such sites. The rate of tax is contingent upon the weight and type of material disposed of at landfill.

Conclusion

The forthcoming legislation aims to discourage non-compliance by making waste crime less profitable, thereby levelling the playing field for the legitimate waste management industry. It is likely to be a valuable tool for HMRC and DAERA in their joint effort to tackle the problem of illegal waste in Northern Ireland.