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HMRC internal manual

Securities Guidance

Calculating the amount of security: the quantum calculation: estimating future revenue risk using taxable turnover: Landfill Tax

It is possible to calculate the amount required in security by estimating future liability based on the registrable person’s estimated ‘taxable turnover’.

The person includes an estimate of annual tonnage for each type of waste on the LT1 registration document. Always round up the figure.

There are two rates of Landfill Tax depending on the type of waste being disposed of. Use the appropriate formula from the following:

Formula A - for traders dealing only in the lower rate of waste

Level of tonnage (Lower rate) x rate per ton/2

Formula B - for traders dealing only in standard rate waste

Level of tonnage (Standard rate) x rate per ton/2

Formula C - for traders dealing in both standard and lower rate waste

(Formula A) + (Formula B)

For example, anticipated levels of tonnage are 5000 tonnes at the lower rate and 3000 tonnes at the standard rate. The current rates of Landfill Tax are £2.50 and £56 respectively.


Formula A 5000 x £2.50 = £6,250


Formula B 3000 x £56 = £84,000


Formula C calculation would result in a figure of £90,250 (the total of Formula A + Formula B).

Information on tonnages of waste may also be available from the Environment Agency (or Scottish Environmental Protection Agency in Scottish cases), as Landfill Tax traders must render returns to the Environment Agency declaring tonnages of waste.

If the LT1-estimated taxable turnover is all the information you have, consider issuing a warning letter to prompt the person to provide more information on which to base your calculation of the amount of security.

It is essential that you keep a written record of how you came to your decision on the amount of security. This will be invaluable if the person appeals to tribunal or requests a review, see SG70200.