HM Revenue and Customs Brief 08/11
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Issued 03 March 2011
Modernising landfill tax legislation – material qualifying
for the lower rate of tax
The purpose of this Brief is to explain changes that are being
made to the legislation relating to the lower rate of landfill tax.
A Treasury Order, the
Landfill Tax (Qualifying Material) Order 1996 (Opens new window),
lists the materials that qualify for the lower rate of landfill tax.
This Order will be replaced by the Landfill Tax (Qualifying Material)
Order 2011, which comes into force on 1 April 2011 and has effect for
disposals of qualifying material made, or treated as made, on or after
Who needs to read this?
Businesses registered for landfill tax or that produce waste
that is disposed of at landfill sites registered for the tax.
Following a joint HM Revenue & Customs/Treasury
consultation the previous year, the June 2010 Budget announced that the
qualifying criteria that Treasury take into account when deciding the
waste materials that are liable for the lower rate of landfill tax,
would be amended from 1 April 2011. These criteria were published in
December 2010 and are set out at
Finance (No 3) Act 2010 section 24 (Opens new window) amended
section 42 of the Finance Act 1996 to provide for the amendment and
publication of these criteria.
Why is the 1996 Order being replaced?
The qualifying criteria for the lower rate of landfill tax,
and the list of qualifying material that are eligible for it, have not
been amended since the introduction of the tax in 1996.
The revisions being introduced by the 2011 Order arise primarily from
the need to reflect changes in wider environmental policy and
legislation since 1996, such as the implementation of the European
Landfill Directive. The changes will improve the tax’s environmental
effectiveness and ensure that decisions regarding the liability of
different wastes are more transparent.
In particular, the 2011 Order will align the list of wastes subject to
the lower rate with new criteria for lower rating. The key changes are
outlined below and a copy of the 2011 Order and its Explanatory Note
Annex B. No later than 1 April 2011 we will also publish the
lower rating criteria and an extract from the new Order in our public
'A General Guide to Landfill Tax'
What will change from 1 April?
- The wording of the Order will make it explicit that rocks
and sub-soils that are currently lower rated will remain so.
- Topsoil and peat will be removed from the lower rate, as
these are natural resources that can always be recycled/re-used.
- Used foundry sand, which has in practice been lower rated
by extra-statutory concession since the tax’s introduction in 1996,
will now be included in the lower rate Order.
- Definitions of qualifying ash arising from the burning of
coal and petroleum coke (including when burnt with biomass) will be
- The residue from titanium dioxide manufacture will
qualify, rather than titanium dioxide itself, reflecting industry
- Minor changes will be made to the wording of the calcium
sulphate group of wastes to reflect the implementation of the Landfill
Directive since 2001.
- Water will be removed from the lower rate – water is now
banned from landfill so its inclusion in the list of lower rated wastes
is unnecessary; where water is used as a waste carrier the water is not
waste and therefore not taxable.
As a result of changes to waste regulation in Northern Ireland
in 2002, we have also taken this opportunity to align with the rest of
the UK the legislation covering the documentary evidence required there
to support a claim to the lower rate. These changes were not, on their
own, significant enough to justify an amendment to the Order before
What about disposals made, or treated as made, before 1 April
To be eligible for the lower rate of landfill tax and be
treated as qualifying material, disposals of material made, or treated
as made, on or before 31 March 2011 must meet the terms of the Landfill
Tax (Qualifying Material ) Order 1996 (Opens new window).
For further information and advice please contact the Excise
and Customs Helpline on 0845 010 9000.
Annex A – new lower rating
In drawing up wastes to be listed in its lower rate Order,
the Treasury will have regard to the criteria set out below. These are
the principles that guide the Treasury’s considerations – a waste will
be lower rated for landfill tax from 1 April 2011 only if it is listed
as a qualifying material in the Landfill Tax (Qualifying Material)
Order 2011, which will be laid before Parliament in spring 2011.
Wastes which are not 'hazardous’ within the meaning of the
Council Directive on Hazardous Waste (91/689/EEC). (This should be
superseded shortly by the revised Waste Framework Directive
Low potential for greenhouse gas emissions
Wastes which are not biodegradable, have a low organic
content or do not break down under the anaerobic conditions that
prevail in landfill sites to produce methane. These include inert waste
within meaning given under the Landfill Directive; and waste with
little or no organic content such as inorganic residues or completely
combusted residues from the incineration of biodegradable/organic
Low polluting potential in the landfill environment
- Waste where the contaminants are unlikely to become mobile
in the landfill and any leachate produced has little or no pollution
- Where the pollution potential of the waste is reduced if
deposited alone in mono-fill landfill sites or within separate cells
(not mixed with other wastes) within a landfill site.
- The engineering requirements for the landfill are lower
that would be the case for a non-hazardous landfill (as laid out in the
Landfill Directive) by virtue of a risk assessment agreed with the
- The aftercare period and requirements are significantly
lower than would normally be required for a non-hazardous waste
landfill, based on a risk assessment agreed with the regulator.
Draft Landfill Tax (Qualifying Material) Order 2011(PDF 33K)
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Article Published/Sorted/Amended on Scopulus 2011-03-06 18:10:12 in Tax Articles