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HM Government plans to overhaul the Landfill Tax system

24/04/2009

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Following this weeks Budget announcements new details have emerged of proposed changes to the Landfill Tax system. The Treasury wants to change the Landfill Tax system to reflect changes in waste management practise and waste law. The Treasury has published a consultation document which explains the planned changes to Landfill Tax legislation which includes proposals to charge a higher rate of tax for some materials which are currently considered inert and charged a lower rate of tax, such as coal fly ash.

The Treasury has outlined plans to redefine a number of wastes currently classed as inert waste under the levy which currently only incur a charge of £2.50 per tonne when landfilled. These instead would be subject to the full level of tax, which is currently £40 per tonne.

The document claims that the overhaul is necessary to reflect changes in environmental protection regulation since the Tax was first introduced in 1996.

Among the wastes which it said it expected to no longer qualify for the lower rate are: coal fly ash (pulverised fuel ash); bottom ash and slag and boiler dust; furnace slags including slag from waste incineration; used foundry sand; gypsum/ calcium sulphate; brine waste; red mud; and, low activity inorganic compounds.

The Treasury estimates that this change could cost up to £160 million based on current landfill tax rates, with the largest burden attached to coal fly ash, at £112.5 million.

The Treasury suggested that these changes will be introduced on a transitional basis to "assist in managing the impact of wastes moving from the lower rate to the standard rate of tax".

It suggested this be done either by delaying its implementation for a year longer than the other changes proposed in the document or by introducing a separate "transitional rate" of Landfill Tax for a set period.

Read more about the consultation document

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