Landfill tax modernisation: new consultation on lower rate
The measure
Certain materials currently qualify for the lower landfill tax ('LFT') rate of £2.50, eg inert waste such as minerals, ash, rocks and soils etc. HMRC are looking at what materials are eligible for the lower rate and it is probable that some of these materials will become subject to the full rate (£40 per tonne from 1 April 2009, rising to £48 per tonne from 1 April 2010).
Who will be affected?
Businesses registered for landfill tax.
When?
This change is subject to consultation and it is likely that transitional arrangements will be introduced to help taxpayers manage the change. Responses to the consultation are due by 24 July 2009.
HMRC state that these proposed changes are to bring the UK landfill tax legislation into line with the EU Landfill Directive by basing the lower rate on the inert characteristics of the waste. However the changes, which are likely to be introduced in Finance Bill 2010, are also expected to increase landfill tax revenues by up to £160m. This extra cost will fall on both landfill site operators and also on businesses which produce such waste.
