Landfill Tax: increase in rates
Published 30 October 2024
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This publication is available at https://www.gov.uk/government/publications/landfill-tax-rates-for-2025-to-2026/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 Spring Budget 2024, both the standard and lower rates of Landfill Tax will increase from 1 April 2025 in line with the Retail Prices Index (RPI), adjusted to account for high inflation in the period 2022 to 2024 and 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 adjusted to better reflect actual RPI means that Landfill Tax can continue to help the government meet its environmental objectives.
Background to the measure
This measure was announced at Spring Budget 2024.
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. 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 adjusted to account for high inflation in the period 2022 to 2024 and will apply to taxable disposals made, or treated as made, at relevant landfill sites and unauthorised waste sites, on or after 1 April 2025. 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 2024-25 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 2024 | Rates from 1 April 2025 |
|---|---|---|
| Standard rated | £103.70 tonne | £126.15 tonne |
| Lower rated | £3.30 tonne | £4.05 tonne |
Summary of impacts
Exchequer impact (£ million)
| 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 |
|---|---|---|---|---|---|
| — | + 35 | + 35 | + 20 | + 20 | + 20 |
These figures are set out in table 5.2 of Autumn Budget 2024 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Spring Budget 2024.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
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 anticipated that there will be impacts on those in groups sharing protected characteristics.
Impact on business including civil society organisations
The measure is expected to have a negligible impact on 118 waste site operators. 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 (£ million) (HMRC or other)
HMRC will not incur any operational costs implementing this change.
Other impacts
Increasing Landfill Tax adjusted to better reflect actual 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. These are listed in the following table.
Emissions impact (MtCo2e)
| 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 |
|---|---|---|---|---|---|
| 0 | - 0.15 | - 0.12 | - 0.11 | - 0.11 | - 0.14 |
Monitoring and evaluation
This measure will be monitored through receipts and tonnage information collected from tax returns.
We will continue to work with Defra and the Environment Agency on monitoring and evaluation, given their roles and responsibilities in relation to waste policy and regulation.
Further advice
If you have any questions about this change, contact Mark Riley by:
- telephone: 03000 510 729
- email: mark.riley@hmrc.gov.uk