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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit - Landfill Tax (LT): power to take recovery action for an LT debt

Landfill tax due from any person shall be recoverable as a debt due to the Crown (paragraph 11 of Schedule 5 to the Finance Act 1996).

Amounts incorrectly charged and amounts assessed (including penalties and interest) as due from any person are deemed to be amounts of LT and may, therefore, be recovered as debts due to the Crown.

Debts due to the Crown

The Legislation covering Environmental Taxes can be found in DMBM450140.

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Power to recover assessed amounts as tax due

The power to recover assessed amounts as tax due can be found in Section 50 (7) of the Finance Act 1996.

The power to recover assessment amounts as Landfill Tax due from unregistered persons that are liable for the tax due on disposals at unauthorised sites can be found under Section 50 A(6) of the Finance Act 1996 (as amended).

The power to assess (e.g. prime assessment) is sections 50 (1) and 50 A(1) of the Finance Act 1996 (as amended). A copy of the assessment is to be sent to the Enforcement and Insolvency Service (EIS) when reporting the debt for civil recovery action.

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Power to recover penalties and interest as tax due

The power to recover penalties and interest as tax due can be found in Paragraph 32 (8) of Schedule 5 to the Finance Act 1996. This relates to penalties assessed under part 5 of schedule 5 to the Finance Act 1996 and associated interest; this inherently relates to registered Landfill Taxpayers. The Penalties Team has policy for interest and civil penalties. 

Penalties raised against persons due to disposals made, knowingly caused, or knowingly permitted at unauthorised waste sites are not recovered using the above. Such penalties are recovered under Paragraph 16(7) of Schedule 41 of Finance Act 2008. Schedule 41, penalties that are payable where a person does an act, enables HMRC to assess an amount as Landfill Tax due from the person under section 50A of Finance Act 1996 (as amended).

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Power to recover incorrectly charged LT

Paragraph 44 of Schedule 5 to the Finance Act 1996 refers to the recovery of the “amount equal to the amount shown as tax” or the “amount equal to the excess” as a debt due to the Crown. The amount is not tax and the practical effect of this is that we do not issue an assessment (Form LT 641). We issue a demand letter and refer to paragraph 44 of the Act. The debt will not be enforced where the amount is refunded to the customer.