Who is likely to be affected
Landfill site operators who are liable to pay Landfill Tax in England, Wales and Northern Ireland.
General description of the measure
This measure will redefine a taxable disposal for Landfill Tax purposes so that any material disposed of at a landfill site will be taxable unless expressly exempt. New exemptions will be introduced so that a charge to Landfill Tax does not arise on material currently outside the scope of the tax.
This measure will also remove the requirement to notify HM Revenue and Customs (HMRC) of certain activities undertaken on a landfill site.
This measure will simplify the tax system, providing greater clarity and certainty to landfill operators and put beyond doubt when there is a charge to Landfill Tax on material deposited at a landfill site.
Background to the measure
Landfill Tax was introduced on 1 October 1996 to discourage the disposal of waste to landfill, and encourage more sustainable ways of managing waste.
In response to ongoing challenges by a number of landfill operators, Budget 2016 announced a consultation on changes to the criteria for determining when Landfill Tax is due. A consultation paper was published in May setting out proposals to amend the criteria, acknowledging that a number of new exemptions would be required to avoid inadvertently extending the scope of the tax. HMRC shared a list of proposed exemptions with key stakeholders during the consultation period and subsequently shared a simplified list reflecting feedback from the consultation.
As Landfill Tax was devolved to Scotland in April 2015 these changes will not apply to landfill operators in Scotland. From April 2018, Landfill Tax will devolve to Wales. These changes will apply to landfill operators in Wales until the tax is devolved, when it will be for the Welsh government to determine the structure of the Welsh Landfill Disposals Tax.
HMRC will publish revised guidance on GOV.UK and issue a mailshot to inform industry of the changes before they come into effect.
The reforms will have effect after Royal Assent on a day to be appointed by Treasury Order.
Landfill Tax primary legislation is contained in Finance Act 1996. Section 40 defines a taxable disposal on which a charge to Landfill Tax can be made. Section 65A allows the Treasury to prescribe in an order activities at a landfill site that are within the scope of the tax. Paragraphs 1A and 1B of Schedule 5 to the Act provide for regulations requiring a person to designate an information area on a landfill site and requiring record-keeping relating to site restoration.
The Landfill Tax (Prescribed Landfill Site Activities) Order 2009 (SI 2009/1929) prescribes a number of activities at a landfill site that are within the scope of the tax.
The Landfill Tax Regulations 1996 (SI 1996/1527) deal with various administrative aspects for the tax, including provisions relating to information areas in paragraph 16A.
Legislation will be introduced in Finance Bill 2017 to amend section 40 of Finance Act 1996. This will remove the waste criteria and the requirement for a disposal to be made by way of landfill. It will provide for exemptions to be set out in secondary legislation so that a charge to Landfill Tax does not arise on material currently outside the scope of the tax.
Changes will be made to Schedule 5 to the Act and to The Landfill Tax Regulations 1996 to remove various notifications that landfill operators are required to make to HMRC, including activities taking place in site information areas and the carrying out of site restoration.
Section 65A of the Finance Act 1996 will be repealed along with The Landfill Tax (Prescribed Landfill Site Activities) Order 2009. There will also be consequential amendments to Finance Act 1996 and Landfill Tax Regulations 1996.
Summary of impacts
Exchequer impact (£m)
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This measure is not expected to have an Exchequer impact.
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
Landfill Tax is charged only to businesses. There are no impacts arising for individuals or households.
The measure is not expected to impact on family formation, stability or breakdown.
This measure will affect businesses and other organisations liable to Landfill Tax. There will be no direct impact on individuals. As such, the government expects that there will be no differential impact on different equality groups.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on business. There are approximately 150 landfill operators registered for the tax. There will be a negligible one-off cost relating to familiarisation with the new rules. They will incur negligible on-going savings through the removal of the requirement to inform HMRC about certain non-taxable activities.
There is no impact on civil society organisations.
Operational impact (£m) (HMRC or other)
HMRC will incur negligible costs implementing this policy.
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored through the existing compliance programme for Landfill Tax.
If you have any questions about this change, please contact Daniel Taylor on Telephone: 03000 585973 or email: firstname.lastname@example.org.