Landfill Tax: removal of exemption for stabilisers added to dredgings sent to landfill
Published 13 July 2026
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Who is likely to be affected
Landfill site operators who accept dredgings at their site. Ports, waterways and harbours who send dredgings to landfill sites. Businesses such as energy from waste facilities which produce materials which are then used as stabilisers in dredgings sent to landfill.
General description of the measure
The measure will remove the Landfill Tax exemption for materials added to dredged material as stabilisers before disposal. As a result of this change, only the dredged material itself will remain exempt. Any additional material used to stabilise dredgings, such as air pollution control residues (APCr), will be subject to Landfill Tax at the relevant rate.
Policy objective
Currently, the Landfill Tax exemption for dredged material includes materials added to stabilise dredgings prior to landfill. This measure will ensure that the Landfill Tax exemption applies only to dredged material. This will provide an economic incentive to limit the amount of stabiliser used and encourage the diversion of recyclable stabiliser materials from landfill, consistent with the government’s circular economy ambitions.
Background to the measure
The measure was announced at Budget 2025 and follows a consultation on Landfill Tax reforms published on 28 April 2025 during which the government engaged with stakeholders in a range of sectors. The consultation closed on 21 July 2025 and a summary of responses was published at Budget 2025.
Detailed proposal
Operative date
This measure will have effect from 1 April 2027.
Current law
Section 43 of Finance Act 1996 (FA96) exempts certain material from Landfill Tax by treating its disposal at a landfill site as one which is not a ‘taxable disposal’. It includes material that has been removed, by dredging or otherwise, from a river, canal, watercourse, dock or harbour, plus other material which has been added for the purpose of stabilising liquid waste. As a result, any materials added as stabilisers are treated as non-taxable.
Proposed revisions
Legislation will be introduced in Finance Bill 2026-27 to amend section 43 of FA96 to limit the exemption from Landfill Tax to dredged material only.
Summary of impacts
Exchequer impact (£ million)
| 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 | 2030 to 2031 | 2031 to 2032 |
|---|---|---|---|---|---|
| Empty | Empty | Empty | Empty | Empty | Empty |
The final costing will be subject to scrutiny by the Office for Budget Responsibility and will be set out at a future fiscal event.
Macroeconomic impact
This measure will be formally assessed once costings have been certified by the Office for Budget Responsibility but is not expected to have any significant macroeconomic impacts
Impact on individuals, households and families
This measure will have no impact on individuals as it only affects businesses.
This measure is not expected to impact on family formation, stability or breakdown.
This measure is expected overall to have no impact on individuals’ experience of dealing with HMRC as the change does not change how individuals interact with HMRC.
Equalities impacts
This measure only affects businesses therefore it is not anticipated that there will be disproportionate impacts on any protected groups.
Administrative impact on business including civil society organisations.
This measure is expected to have a negligible administrative impact on approximately 20 landfill site operators in the UK who accept dredgings for landfill. One-off costs include familiarisation with the changes to how the dredging exemption operates. It is not expected that there will be any continuing costs.
Businesses currently benefitting from material used as stabilisers in dredgings being exempt from Landfill Tax for example producers of APCr or landfill sites mixing stabilisers and dredgings, would pay a higher disposal rate. However, the aim of the measure is to encourage alternative uses for these materials rather than send them to landfill.
There is expected to be no impact on civil society organisations.
This measure is expected overall to have no impact on business’ experience of dealing with HMRC as the change does not change how they interact with HMRC.
Operational impact (£ million) (HMRC or other)
HMRC will not incur any costs making these changes.
Other impacts
We expect this measure to have a negligible impact on the environment. Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be monitored through information collected from receipts, Landfill Tax returns and other data supplied to HMRC during the development of this measure.
Further advice
If you have any questions about this change, contact Michael Lyttle on Telephone: 03000 585637 or email: michael.lyttle@hmrc.gov.uk.