HMRC announces ‘operational flexibility’ for Landfill Tax calculation

Her Majesty’s Revenue and Customs (HMRC) has announced a degree of ‘operational flexibility’ for landfill site operators for Landfill Tax operators in light of the Covid-19 outbreak as standard rate increases to £94.15 per tonne for 2020/21.

The flexibility measures were laid out in a briefing note sent to landfill site operators registered for Landfill Tax on Thursday (2 April), which also detailed the financial support made available to businesses during the coronavirus crisis.

Landfill site.On 17 March, Chancellor Rishi Sunak announced a package of financial support to businesses affected by the coronavirus outbreak and the associated government measures implemented to contain the spread of the virus.

The package of measures includes a Coronavirus Job Retention Scheme, whereby the government will cover 80 per cent of salaries of up to £2,500 per month for employees placed on furlough, deferring VAT and Income Tax payments and small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief.

Acknowledging that the Covid-19 outbreak is likely to have an operational impact on landfill sites, HMRC’s briefing note provides clarification on ‘available operational flexibility’. Landfill tax rates for 2020/21 have increased to £94.15 per tonne for the standard rate and £3 per tonne for the lower rate, up from £91.35 and £2.90 respectively.

Operators using a weighbridge to calculate Landfill Tax will be able to cut down on the handling of documentation by no longer needing to get weighbridge tickets signed by both the landfill site operator and the customer.

Furthermore, if it becomes impractical to use a weighbridge due to Covid-19 disruption, one of the three alternative methods that can be used for sites without a weighbridge specified in Section 9 of Excise Notice LFT1: Maximum permitted weight of container, volume to weight conversion or weight material prior to receipt at the site.

One or a mixture of these can be used, or a bespoke method can be proposed that will produce a ‘fair and reasonable’ calculation of weight. Those intending on using alternative methods should notify HMRC of this, with those proposing to use a bespoke method requiring prior agreement from HMRC, and they should return to using the weighbridge method as soon as practically possible.

Landfill Tax also covers fines – fines are particles produced by a waste management process that involves mechanical treatment. For fines to qualify for the lower rate of Landfill Tax, pre-acceptance checks, visual inspection upon receipt at the landfill site and Loss on Ignition tests need to be carried out.

While landfill sites remain open, HMRC ‘would expect  landfill site operatives to be able to continue carrying out visual inspections and collecting samples in line with the published guidance contained within the Excise Notice LFT1’.

However, HMRC acknowledges that due to disruption to courier deliveries to laboratories may take longer, and so samples should be submitted for testing ‘in as timely manner as possible’.

Loss on Ignition testing regimes for qualifying fines for the lower rate of landfill tax will also be relaxed. Loss on Ignition retests normally have to be carried out within 21 days, but due to Covid-19 disruption these should be carried out ‘as soon as is reasonably possible’.