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Waste Sent to Landfill Will Be Taxable Unless Expressly Exempt

The HM Revenue and Customs (HMRC) has announced that any material disposed of at a landfill site will be taxable unless “expressly exempt.”

The Government announced in its 2016 Spring Budget that it would consult on proposals to reform Landfill Tax legislation, with the aim of clarifying the areas of uncertainty that have previously led to litigation.

Following a consultation earlier this year, which set out proposals to amend the criteria for determining when Landfill Tax is due, the HM Revenue and Customs (HMRC) has now announced that legislation will be introduced in the Finance Bill 2017 to amend section 40 of Finance Act 1996. 

All landfill operators in England and Wales must currently charge a higher or lower rate of tax on all materials accepted at sites except for those used in ‘prescribed activities’. These activities include waste used in landfill restoration, or in the construction of permanent landfill site roads. 

The consultation was launched to amend this list of prescribed activities, with the aim of simplifying the tax system, and providing greater clarity and certainty to landfill operators. It will also remove the requirement to notify HMRC of certain activities undertaken on a landfill site.

HMRC is proposing to remove the current waste criterion and to introduce two new exemptions for material deposited outside of the landfill cell and for the drainage layer of the landfill cell (including any pipes inserted into the landfill cell for the purpose of extracting surplus liquid or gas). 

The government has now launched an eight-week technical consultation before the amendments are carried into legislation in 2017.

You can read the policy paper Landfill Tax: definition of taxable disposal and see the summary of responses to the consultation here.

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