A brief was released on 18 May describing two substantial changes in the way that Landfill Tax is governed by HMRC. Tax must now be paid for any material deposited at the top of a landfill cell and an increased level of Tax must be also paid for fines from recycling processes, grit and screenings.
The layer of material at the top of a landfill cell (known as the “top fluffy layer”) is used to add stability for the overlying clay cap liners. Traditionally this layer has been categorised as engineering material and so hasn’t been susceptible to Landfill Tax. However, HMRC has stated that this material should be liable to taxation as it is disposed of primarily with the intention of being discarded rather than used for engineering purposes.
With respect to fines (the range of materials that have undergone some form of reuse, recycling or recovery process prior to disposal to landfill), HMRC has also reduced the number of materials that qualify for the £2.50/t Landfill Tax rate in the Landfill Order 2011. As the variable nature of inerts means that it is impossible to determine the exact nature of the material, it no longer qualifies for the reduced rate and will therefore be charged at the full rate of £64/t.
The raise in fines Landfill Tax follows the increased Landfill Tax rate for rocks and soils, which many would still class as inert material, the likely result of which is an increase in the cost of skip hire due to the shortfall in outlets for these materials. This is also likely to have a knock-on effect on recycling rates if such materials can no longer be classed as recycled.