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Two changes to the rules governing Landfill Tax have been announced by Her Majesty’s Revenue and Customs sending ‘waves’ throughout the waste industry.


On Friday 18th of May a brief was published by the HMRC, this brief is for landfill site operators and their advisers. It provides further clarification on the Landfill Tax treatment of material used on a landfill site and also the evidence needed when considering whether to apply the lower rate of Landfill Tax to certain wastes.

The brief said that tax should be paid on material used to protect or ‘provide a suitable stable substrate’ for the overlaying layers at the top of a landfill cell.

Waste materials used at the top of landfill cells as well as those used at the bottom have been brought within the scope of landfill tax by the HMRC.

In addition, fines from screening, grit and recycling processes will no longer be eligible for the lower £2.50 rate of landfill tax applied to inert material.

Also, the full rate of £64.00 must be charged per tonne.

These changes are expected to have a big impact on the waste management sector, which previously has not had to shoulder landfill tax costs for this material.

Some within the waste industry have also said that this could even push up prices on recycling and waste disposal.

A landfill tax expert commented:

“The bulletin is causing waves throughout the industry even since Friday, given the two fundamental issues being addressed – namely ‘fluff’ and ‘trommel fines’.”

WRG case brings change

A landmark case in 2008 involving HMRC and Waste Recycling Group has brought upon these changes.

During the case the court ruled, that inert material brought onto site by WRG and used for temporary structures, such as daily landfill cover and site engineering purposes, will not be liable for taxation if it has not been disposed of.

WRG received the tax back from HMRC, which paved the way for another £300million in repayments.

Some operators had apparently tried to claim back tax paid on ‘top fluff layer’ material, according the HMRC.

After a broad discussions with the Environment Agency, the HMRC concluded that this material should be (and always should have been) liable to Landfill Tax.  The reason behind this is that the waste material is disposed with the intention of discarding it and the disposal does not constitute a use of that material.

The HMRC said that, where operators have not paid tax for this material and did not seek to do so, they will initiate assessments to ensure all landfill site operators paid the correct amount.

However, it warned:

“The matter will be litigated if necessary. HMRC will enforce these assessments and penalties may also be applicable in such cases.”

The HMRC did note that the material which was used to ‘form the regulation layer’ in landfill sites by providing protection to the cap would constitute a use up until the 1st of September 2009, when the rules were changed to bring specific uses of waste back into the scope of Landfill tax.

It said: “The basis for this conclusion is that such a regulating layer is an engineering specification which would be set out in the specific agreements between the site operator and the EA.”


Regarding trommel fines, grits and screenings, the HMRC said that materials qualifying for the lower £2.50 –per-tonne rate of landfill tax have been reduced in its Landfill Tax Order 2011 therefore the materials no longer qualify.

Therefore it said that the £64-a-tonne rate of tax would apply because the material, while often motionless is variable in nature.

Materials which have been subject to some form of reuse, recycling or recovery process before the disposal of the residue to landfill are the materials in question.

Also known as waste transfer fines, trommel fines, fines for landfill cover, grit and screenings.

The HMRC explained: “Any residue from treated transfer station waste that is consigned to landfill will be very variable and it will be impossible to determine the origin and exact nature of the source material.”

An HMRC spokesman commented on the changes and denied that they represented a move to claw back money.

He continued to say: “If you lose a tribunal case you have to look at your interpretation of the law. It’s wrong to say we lost so we are trying to claw back the money from elsewhere.”

What was the Response?

The first reaction came from Leslie Heasman, managing director of technical specialists MJCA.

She said that the latest HMRC decisions followed the clarification in 2009 that selected wastes/materials used to provide protection to the drainage blanket and overlying geotextile layer were subject to landfill tax.

Ms Heasman continued to say that:

“There are two separate issues in this latest ruling concerning the protection wastes/material for the cap and the transfer station fines. We now have clarification that the wastes/materials used to provide the foundation for the clay lined cap are not considered by HMRC as engineering material and are subject to landfill tax.”

She also explained that while under a 2011 Order which allowed fines – a category of rocks and soils – to count for tax at the lower rate, the HMRC have now clarified this to say that material had to exactly meet the specified conditions.

Ms Heasman said: “MRFs and transfer stations and other recycling facilities will have to look again at their segregation processes and there could be quite big cost implications.”


Managing Director of Suffolk-based Bolton Bros, Reuben Bolton, as well as a past president of the Recycling Association said that the believed the new ruling could hit recycling rates and force up charges for the hiring of skips.

He said: “Already today our local landfill is charging us landfill tax for soil and stones we have recovered which we believe to be processed inert material which has been used as engineering cover before.”

“There are not enough outlets for this type of material and it could mean us having to put up charges for skip hire three or fourfold.”

A prediction by Mr Bolton that the recycling rate reported by civic amenity sites and waste transfer stations could fall dramatically, as the material was no longer attracting the lower rate and would therefore not be counted as ‘recycled’ when used as the foundation for the landfill cap, might be very accurate.


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