Landfill tax rate now at £82.60 a tonne

The standard rate for landfill tax has today (1 April) risen from £80 to £82.60 per tonne of waste disposed. The lower rate (for ‘less polluting’ wastes) has also increased from £2.50 to £2.60 per tonne. This increase, as announced in the 2015/2016 budget, is in line with the Retail Price Index (RPI).

Operators disposing of waste in Scotland are also now liable to the new devolved Scottish landfill tax, which for this year is also set at £82.60 (or £2.60 for ‘less polluting’ wastes).

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 sites, and ultimately encourage recycling.

The tax has been a source of contention however, with stakeholders previously calling on government to both increase the tax, and – contrastingly – freeze it.

According to the 2015/2016 budget, the total amount of landfill tax and Landfill Communities Fund money being brought in to the Treasury will rise by £5 million, increasing to £10 million in 2017/18 and 2018/19.

Mandatory loss on ignition testing

Loss-on-ignition (LOI) testing is also mandatory from today.

The LOI testing regime determines the correct landfill tax rate of fines (residual waste produced during the processing of waste at mechanical treatment plants), to prevent waste being classified incorrectly.

This will have implications for the 450 mechanical treatment plants and 200 registered landfill site operators in England, Wales and Northern Ireland.

Where there is a LOI fine measurement of 10 per cent (or less), the lower landfill tax rate will apply. Fines above this threshold will be subject to today’s higher rate of £82.60 per tonne.

Sam Corp, Head of Regulation at The Environmental Services Association (ESA), welcomed the introduction of LOI testing today, stating: “ESA and its members have been working closely with HMRC and Treasury officials over the last two years to develop the regime. We believe that an objective LOI test will go a long way to prevent the misclassification of waste, which has been so costly to responsible operators and to the UK’s economy.

“The purpose of the LOI regime was to help provide a level playing field for all operators – both those producing and those disposing of waste fines – and to prevent misclassification of waste fines either deliberately or otherwise. It is therefore vital that HMRC is both consistent and robust in its enforcement to ensure that the new requirements are properly implemented by all parties.”

Figures for the future

Landfill tax is England, Wales and Northern Ireland is expected to continue to increase with RPI, with government announcing in the Budget 2016/17 that it will rise to £84.40 (or £2.65 for the lower rate) from 1 April 2016.

It is not yet known what the landfill tax rate in Scotland will be for next year.

Find out more about the new landfill tax, Scotland’s landfill tax or read for more information on the LOI testing regime.

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