Rates set for new three-band Welsh landfill tax

The Welsh Government has set the rates for its new devolved Landfill Disposals Tax, maintaining the UK’s standard rate but adding a new band for unauthorised disposals to provide a deterrent against waste crime.

Wales will become the first country in the UK to introduce a new higher rate of landfill disposals tax to deter people from disposing of waste illegally on 1 April 2018, when it introduces its first new taxes for over 800 years. The possibility of implementing a similar measure for England was consulted on earlier this year.

The new tax is largely the same as the current system, but the Welsh Government says it will make the rules clearer and easier to understand, in order to reassure businesses and mitigate the risk of waste tourism.

For the first two years of the Landfill Disposals Tax, the standard and lower rates will remain consistent with those set by the UK’s Landfill Tax. The Welsh Government says this will ‘provide certainty and stability for businesses and reduce the risk of waste moving across the Wales-England border’.

The new rate for unauthorised disposals will be set at 150 per cent of the standard rate. For the tax year 2018/19, the unauthorised disposals rate will be set at £133.45 per tonne, compared to the standard rate of £88.95 and a lower rate for inert waste of £2.80.

Forecasts for the 2019/20 year suggest the standard rate will increase to £91.70 per tonne, with the unauthorised disposals rate accordingly rising to £137.55 and the lower rate increasing slightly to £2.90.

The tax, which the Office for Budgetary Responsibility forecasts will generate £27 million in 2018/19, will tax the disposal of waste to landfill in Wales and will be payable by the 20 landfill site operators running the 25 active landfill sites in Wales, with the costs falling on waste operators.

Announcing the rates and bands, Welsh Finance Secretary Professor Mark Drakeford said: “From April, Wales will introduce the first Welsh taxes in almost 800 years, supporting first-time buyers and boosting business. The devolution of tax powers provides us with the opportunity to reshape and make changes to improve existing taxes to better meet Wales’ needs and priorities. I have always been clear that we will use these powers to help improve fairness and support jobs and economic growth in Wales.

“These new progressive rates and bands for landfill disposals tax will make a real difference to people’s lives; help change behaviours and deliver improvements to communities across Wales. We are being bold but balanced and leading the way in creating a fair and progressive tax system.”

Possibility of future Disposable Plastics Tax in Wales

Hot on the heels of the new taxes, four more ideas are set to be developed over the autumn after feedback from the public. Among these is an idea for a tax on disposable plastic.

The Welsh Government will investigate this, along with the other three ideas (a vacant land tax, a tourism tax and a levy to support social care) in the coming months and put one proposal forward to the UK Government in 2018.

Professor Drakeford added: “In July, I started a national debate asking people to put forward ideas for potential new Welsh taxes. We received a large number of responses and I’d like to thank everyone who got involved and helped shape future Welsh taxes.

“The power to propose new taxes is an important one, which we can use to deliver improvements for our communities. The four new tax ideas have the potential to do just that.

“Over the coming months, further work will get underway to refine these before we propose one idea to the UK Government early next year.”