Landfill Tax increase in rates
Published 15 March 2023
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This publication is available at https://www.gov.uk/government/publications/landfill-tax-rates-for-2023-to-2024/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
As announced at Autumn Budget 2021 both the standard and lower rates of Landfill Tax will increase from 1 April 2023 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. 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 Landfill Tax can continue to help the government meet its environmental objectives.
Background to the measure
This measure was announced at Autumn Budget 2021.
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 two Treasury Orders, and a standard rate, which applies to all other taxable material disposed of at authorised landfill sites. Landfill Tax was devolved to Scotland in 2015 and to Wales in 2018.
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 2023. 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 Spring Finance Bill 2023 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 2022 | Rates from 1 April 2023 |
|---|---|---|
| Standard rated | £98.60/tonne | £102.10/tonne |
| Lower rated | £3.15/tonne | £3.25/tonne |
Summary of impacts
Exchequer impact (£m)
| 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 |
|---|---|---|---|---|---|
| — | 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 macroeconomic impact.
Impact on individuals, households and families
This measure is not expected to 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 expected that there will be adverse effects on any group sharing protected characteristics.
Impact on business including civil society organisations
The measure is expected to have a negligible impact on 124 waste site operators and is not expected to increase business customer costs significantly. Negligible one-off costs will include familiarisation with the change and could involve updating internal systems to reflect the new rate. There are not expected to be any continuing costs. This measure is expected overall to have no impact on businesses experience of dealing with HMRC as the change is the expected annual uprating of Landfill Tax and does not change any processes or tax administration obligations. This measure is not expected to have any impact on civil society organisations.
Operational impact (£m) (HMRC or other)
HMRC will not incur any operational costs implementing this change.
Other impacts
Uprating Landfill Tax by RPI maintains the incentive to minimise the amount of material produced and the use of non-landfill waste management options, which may include recycling, composting and recovery.
Other impacts, including carbon impacts, have been considered and no significant impacts have been identified.
Monitoring and evaluation
This measure will be monitored through receipts and tonnage information collected from tax returns.
Further advice
If you have any questions about this change, please contact Alan Jones on Telephone: 03000 552961 or email: alan.jones1@hmrc.gov.uk.