Landfill Tax: increase in rates
Published 29 October 2018
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This publication is available at https://www.gov.uk/government/publications/increase-of-the-landfill-tax-rates/landfill-tax-increase-in-rates
Who is likely to be affected
Operators of landfill sites in England and Northern Ireland. Businesses registered with HMRC for Landfill Tax.
General description of the measure
Both the standard and lower rates of Landfill Tax will increase in 2019 in line with the Retail Prices Index (RPI), rounded to the nearest 5 pence.
Policy objective
Landfill Tax is charged on material disposed of at a landfill site or an unauthorised waste site.
As such, it encourages efforts to minimise the amount of material produced and the use of non-landfill waste management options, which may include recycling, composting and recovery.
Increasing Landfill Tax rates in line with RPI means that the Landfill Tax can continue to help the government meet its environmental objectives.
Background to the measure
This measure was announced at Autumn Budget 2017.
Landfill Tax was introduced on 1 October 1996 to encourage waste producers and the waste management industry to switch to more sustainable alternatives for disposing of material.
There is a lower rate of tax (which applies to less polluting qualifying materials covered by 2 Treasury Orders) and a standard rate (which applies to all other taxable material disposed of at authorised landfill sites).
Previously, the tax applied across the UK but from 1 April 2015 it was devolved in Scotland and from 1 April 2018 in Wales.
Detailed proposal
Operative date
The increases in the standard and lower rates of Landfill Tax in line with RPI will apply to taxable disposals made, or treated as made, at relevant landfill sites and unauthorised waste sites, on or after 1 April 2019.
The rate changes will apply in England and Northern Ireland only. Sites operating without the necessary environmental disposal permit or licence will be liable for Landfill Tax at the standard rate on all material.
Current law
Section 42 of the Finance Act 1996 specifies the rates of Landfill Tax.
Proposed revisions
Legislation will be introduced in Finance Bill 2018-19 to amend section 42(1)(a) and 42(2) to provide for the new rates of Landfill Tax. The rates being amended and the new rates will be:
| Material sent to landfill | Rates from 1 April 2018 | Rates from 1 April 2019 |
|---|---|---|
| Standard rated | £88.95/tonne | £91.35/tonne |
| Lower rated | £2.80/tonne | £2.90/tonne |
Summary of impacts
Exchequer impact (£m)
| 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 |
|---|---|---|---|---|---|
| - | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impact.
Impact on individuals, households and families
Businesses and local authorities bear the cost of Landfill Tax passed on to them by landfill site operators on the material they send to landfill.
This measure will not have a direct impact on individuals or households and is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there are any equalities impacts in relation to any protected characteristics.
Impact on business including civil society organisations
The measure is expected to have a negligible impact on businesses. Those businesses registered with HMRC for the Landfill Tax which will be affected by the rate changes will incur a negligible one-off cost to update their systems.
There are not expected to be any additional ongoing costs. The measure is not expected to have any impact on civil society organisations or any significant impact on competition.
Operational impact (£m) (HMRC or other)
HMRC processing systems are designed to accommodate tax rate changes. The change will not increase HMRC processing or compliance resource.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be monitored through receipts and tonnage information collected from tax returns or other data about volumes of material sent to landfill.
Further advice
If you have any questions about this change, contact Helen Horton on Telephone: 03000 514475 or email helen.horton@hmrc.gsi.gov.uk.