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Landfill site operators will lose out on millions of pounds of landfill tax refunds as the HMRC takes a tougher approach towards taxation rules.


The HMRC has restated that waste being used on landfill sites for roads, capping and liners will be subject to landfill tax. This adjustment comes in response to increasing numbers of refund claims by waste companies for past landfill tax payments and who, according to the HMRC, are challenging “the boundaries of landfill tax legislation”.

The new adjustments are already being challenged by companies in a First Tier Tax Tribunal, which forms part of a formal procedure to question the HMRC’s decisions, with some companies set on taking the matter to the highest possible level.

The dispute dates back to before 2010 when Waste Recycling Group (WRG) – now FCC –argued that landfill tax should not be payable on waste materials that are used for roads and site lining.

The company won its case in the Court of Appeal in July 2008. In 2010 Exchequer Secretary Sarah McCarthy-Fry told Parliament that:

“The effect of the Court of Appeal’s judgment in the Waste Recycling Group case was to reduce the revenue yield from landfill tax and render certain waste materials non-taxable, even though they have a detrimental environmental impact.”

WRG was reimbursed £2.1 million for landfill tax it had paid on material between October 1996 and September 2002 and thereafter it was estimated that some £300 million might have to be refunded.

The HMRC says it has received new legal advice which has propelled a review of outstanding claims.

Furthermore the HMRC has stressed the fact that these “fluff” materials have always been taxable, and are nothing more than waste discarded permanently to landfill.

Furthermore, during the 2008 court case it had been noted that the HMRC invited claims from companies for landfill tax refunds. But, in 2012 guidance was published clarifying the situation.

This guidance took a tougher stance and said:

“It was confirmed that material referred to by some as the ‘reverse or top fluff layer’ constituted careful placement of soft waste which is (and always has been) liable to landfill tax. This is because the waste material is disposed of with the intention of discarding it and the disposal does not constitute a use of that material.”

The Landfill Tax Brief notes that no further payments of side and base fluff claims will be made by the HMRC. Claims for repayment of tax in respect of reverse or top fluff will also be resisted.

For more information on landfill tax click here


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