The Landfill Tax (Amendment Regulations) 2009 came into force on 1st September. The aim of these Regulations is to restore the landfill tax position to what the Government believe it was before the Court of Appeal’s 2008 Judgement in Commissioners for Revenue and Customs v Waste Recycling Group Ltd. In that case, the Court decided that material received at a landfill site and used on the site, for example for engineering purposes or cover, is not subject to Landfill Tax.

As a result of these new Regulations the following changes have been made:

Previous provisions relating to temporary disposals of material or tax free areas on a landfill site have been revoked.

HMRC can now require a landfill operator to designate a part of its landfill site as an “Information Area” where it must deposit material that it is not going to dispose of as waste (for example waste that is to be sorted prior to disposal). Operators must keep records of the material being taken in and out of this area and to provide this information to HMRC.

The Landfill Tax (Prescribed Landfill Site Activities) Order 2009 also came into force on 1st September 2009. The Order sets out a number of uses of material on landfill sites that will be subject to Landfill Tax, including use for cell bunds, haul roads and temporary cover. If such material has already been taxed on disposal, tax will not have to be paid again. For example if, of the materials used to cover waste at a landfill site, 40% has been taxed before, tax will only be due on the 60% previously untaxed.

Where material is taxable by virtue of a landfill activity which is temporary if that material is subsequently put to a non taxable use the Landfill Tax paid on it can be re-credited. This is intended to encourage re-use of materials as opposed to permanent disposal.

These changes, coupled with the proposed changes to the treatment of inert waste in the Treasury’s Landfill tax consultation (which are likely to come to come into force in 2010) are set to increase landfill tax revenues by around £160m. This extra cost will, inevitably, fall on landfill operators and their customers.