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Landfill Tax to Increase With inflation, Clarity Response

George Osborne announced as part of the 2015 Budget that landfill tax will increase with inflation, but did not indicate any long term plans for how landfill will be taxed.

Currently, the landfill tax rate is set at £80.00 per tonne. Tomorrow’s rate will see an increase to £82.60 per tonne.

George Osborne also confirmed that the standard and lower rates of landfill tax will increase in line with the RPI, rounded to the nearest 5 pence, from 1 April 2016.

The Budget document said that the Government intends to provide further long term certainty about the future level of landfill tax rates once the consultation process on testing regime has been completed, but until then, is committed to ensuring that the rates are not eroded in real terms.

The reason given by the Government for the delay on a long term plan is that it first wants to evaluate the introduction of a testing regime for trommel fines.

To this end, the government is introducing a loss on ignition testing regime on fines from waste transfer stations, which will be effective from this April. A consultation will be held on the matter later this year.

The government also announced in the budget that the value of the LCF for 2014-15 will be reduced to £71 million. The result of this is that the cap on contributions by landfill operators will be amended to 5.1 percent.

The government explained that this reduction takes account of inroads that environmental bodies have made to meet the government’s challenge to reduce unspent funds. The saving will be used cover the costs of an equivalent one-off increase to address waste crime.

David Adams, Managing Director at Clarity, said: “This increase is in line with previous announcements and market expectations. Landfill tax was already at a level where producers were forced to look at alternatives to landfill for active waste; this increase can only help fuel the boom in RDF and SRF solutions. Fines however, continue to pose a real problem for many causing a general level of unease across the market.  We [Clarity] are already incredibly busy delivering UK and overseas waste solutions at the current landfill tax level, so with any increase, we can only expect more business to come our way.

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