Landfill tax for 2016/17 set at £84.40
Waste operators wishing to dispose of waste at landfill sites in England, Wales and Northern Ireland will need to pay £84.40 per tonne from 1 April 2016, the Finance (No.2) Bill 2014-15 has revealed.
The bill, which was presented to Parliament yesterday (23 March) and is expected to have passed all its stages tomorrow (25 March 2015), makes into law the duties and tax amendments that were announced in the Budget 2014, the Autumn Statement 2014 and the Budget 2015.
It specifies that from 1 April 2016, the standard rate of landfill tax will rise from its 2015/16 rate of £82.60 per tonne to ‘84.40 for each whole tonne disposed of and a proportionately reduced sum for any additional part of a tonne’, while the lower rate (for ‘less polluting’ wastes) will increase from £2.60 to £2.65 a tonne.
Landfill tax history
Introduced in 1996 at just £7 per tonne, landfill tax initially rose by around £8 every year to deter the practice of sending waste to landfill, thus encouraging waste to be treated higher up the waste hierarchy instead (i.e. reused or recycled).
However, government announced in the Budget 2014 that the tax would rise in line with the retail price index (RPI), currently between two and three per cent, rounded to the nearest five pence, from 1 April 2015. As such, the tax rose from £80 in 2014/15 to £82.60 in 2015/16, and will rise next year to £84.40.
Landfill tax fines
The new Finance Bill also makes provision about the treatment of fines (particles below a certain screen size, often produced by a waste treatment process that involves an element of mechanical treatment) for the purposes of landfill tax.
It specifies that only fines with 10 per cent or less biodegradable and/or combustible content will be considered eligible for the lower tax rate.
Fines will also only be treated as qualifying if prescribed conditions are met. Although these may ‘relate to any matter the Treasury think[s] fit’, they may include conditions making provision about:
- the production of a document which includes a statement of the nature of the fines;
- carrying out a specified test on fines proposed to be disposed of as qualifying fines;
- the frequency with which tests are to be carried out on any fines proposed to be disposed of as qualifying fines;
- the frequency with which tests are to be carried out on any fines that come from a particular source and are proposed to be disposed of as qualifying fines; and
- the steps to be taken by operators of landfill sites in relation to persons sending fines to be disposed of as qualifying fines.
HM Revenue & Customs (HMRC) released detailed guidance relating to the tests required for fines in December 2014.
‘Creating a stable tax system that supports [a] long-term economic plan’
Landfill tax takes up only a small proportion of the bill, with other provisions made in it including:
- increasing the personal allowance by an extra £400 to £11,000 from April 2017;
- exempting children from air passenger duty;
- cutting the petroleum revenue tax from 50 per cent to 35 per cent;
- increasing the tax credits available for large and small businesses investing in research and development;
- introducing a new diverted profits tax of 25 per cent (aimed at multi-national companies that shift their profits offshore to avoid paying UK tax); and
- increasing the bank levy and introducing new rules for banks.
David Gauke, Financial Secretary to the Treasury, said: “The government is committed to supporting hardworking families and backing business. That is why we are making it easier for them to keep more of their hard-earned money and access the help they need to grow.
“The legislation published today builds on our efforts to create a stable tax system that supports our long-term economic plan.”
Read the Finance (No.2) Bill 2014-15.