HM Revenue and Customs Brief 15/12
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Issued: 18 May 2012
Landfill Tax: material used on a landfill site; and
classification of waste
1. Purpose of this Brief
This Brief is for landfill site operators and their advisers
and 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
Landfill Tax contributes to the Government's general and
'green' taxation objectives, including the Government's commitment to
work towards a 'zero waste' economy. It is the key component of the
drive to divert waste from landfill to ensure EU targets are met in
2013 and 2020.
The Brief seeks to give clarity on the Landfill Tax treatment
of waste in certain conditions, and to provide appropriate principles
so that all landfill site operators consistently apply the Landfill Tax
legislation, so allowing operators to compete fairly. This
clarification has been sought by the waste management industry itself
and representatives of landfill site operators.
The Government will consider how best and when to evaluate the
overall Landfill Tax policy against its objective of encouraging the
waste management industry and waste producers to seek more
environmentally sustainable ways of dealing with waste. The impact of
this Brief, and the extent that this policy is achieving its
objectives, will be kept under review through regular communication
with affected taxpayer groups and information collected from Landfill
Tax compliance activities, including whether there are fewer disputes
and litigation in this area.
3. Material used on a landfill site
Following the judgment on 22 July 2008 of the Court of Appeal
in Commissioners for Her Majesty's Revenue and Customs (HMRC) - v -
Waste Recycling Group Limited  EWCA Civ 849 ('the WRG case'),
HMRC set out its position in HMRC Brief 58/08 published on 22 December
2008. On 1 September 2009 the Landfill Tax (Prescribed Landfill Site
Activities) Order 2009 came into force, bringing specified uses of
waste back into the scope of Landfill Tax.
The HMRC Brief invited claims for repayments of tax
incorrectly paid. HMRC has received a number of claims based upon the
advice given within that Brief and, to date, many such claims have been
repaid, subject to the conditions explained in the Brief. Some claims
are in the process of being reviewed.
However, HMRC has received a number of claims from landfill
site operators and their advisers that relate to materials which are
said to be used to protect or provide a suitable stable substrate for
the overlying layers at the top of a landfill cell. This material is
often referred to as a 'landfill reverse fluff layer' or 'top fluff
layer' as opposed to a 'landfill fluff layer', which describes material
used for basal landfill engineering to protect the integrity of the
HMRC has discussed these claims widely, including with site
operators and the Environment Agency ('EA'), and have undertaken site
visits to inform its decision. It has concluded that the so-called
reverse or top fluff layer constitutes careful placement of soft waste
that should not cause damage to the cap or regulating layer placed
above and should be (and always should have been) liable to Landfill
Tax as the waste material is disposed with the intention of discarding
it and the disposal does not constitute a use of that material.
However, HMRC accepts that the material placed to form the regulating
layer (by providing protection to the overlying geo-synthetic
engineered cap) would constitute a 'use', up to the time the 2009 Order
came into force on 1 September 2009. The basis for this conclusion is
that such a regulating layer is an engineering specification which
would be set out in specific agreements between the site operator and
Landfill site operators and their advisers who have made such
claims will have them rejected insofar as they relate to the so-called
reverse or top fluff layer and any further such claims that are
submitted will be rejected.
Up until 31 August 2009, Landfill Tax would not have been due
on materials used in this regulating layer and HMRC will accept any
parts of claims relating to this subject to certain conditions being
met, including considering whether the landfill operator would be
unjustly enriched by any repayment of Landfill Tax.
Since 1 September 2009, by virtue of Article 3 (1)(g) of the
2009 Order, waste deposited in the regulating layer was brought back
into the scope of the tax and HMRC considers that this remains subject
to tax when it is placed against any drainage layer or liner, for
example a geotextile separation layer, since such layers or liners form
an integral part of the landfill liner.
Where operators have not paid tax in accordance with the
clarifications set out above, and where they do not take steps to do so
following this clarification, HMRC will make assessments to ensure that
all landfill site operators pay the correct amount of tax, ensuring
fair and equitable treatment across the industry. The matter will be
litigated if necessary. HMRC will enforce these assessments and
penalties may also be applicable in such cases.
4. Classification of waste: determining the Landfill Tax
Paragraph 3 of Notice LFT 1 'A general guide to Landfill Tax'
sets out the evidence required to apply the lower rate of tax to any
particular disposal of waste and the Landfill Tax treatment of mixed
To qualify for the lower rate, the waste transfer note, which
is required to accompany most movements of waste in the UK, must
accurately describe the waste so that it can be related to the terms
used in the Landfill Tax (Qualifying Material) Order 2011 (SI
2011/1017) ('the 2011 Order'), which came into force on 1 April 2011.
In other words the load must not only be of material listed in the
Order, but also described in a manner that clearly evidences that fact
on a waste transfer note and/or any other commercial documentation.
This requirement applies to all scenarios regardless of whether the
load concerned may be considered to contain an 'incidental' amount of
standard rated waste.
The material must be listed in one of the groups within the
Schedule to the 2011 Order and meet the specified conditions. For
example, in the case of Group 1 'Rocks and soils', the group comprises
only naturally occurring - rock, clay, sand, gravel, sandstone,
limestone, crushed stone, china clay, construction stone, stone from
the demolition of buildings or structures, slate, sub-soil, silt and
By limiting (in respect of soils) the scope of Group 1 to
subsoil, the 2011 Order ensures that other soils such as topsoil,
construction soil and soil from demolition of buildings or structures
are taxable at standard rate of Landfill Tax.
Where the landfill site operator is not able to demonstrate
that the load is of material exactly as described in the 2011 Order,
the standard rate of Landfill Tax should be applied.
A number of waste streams consigned to landfill arrive from
waste transfer stations and material recovery facilities for final
disposal. These wastes will have originated from a number of sources
and have been subject to some form of treatment which prioritises
re-use, recycling and recovery with disposal at landfill as a final
option. For many wastes a suitable treatment might be sorting for
recycling and recovery and significant levels of segregation can occur.
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. These residues are
commonly described as waste transfer station fines, trommel fines,
fines for landfill cover, grit and screenings etc. these are not
qualifying materials as listed in the Schedule to the 2011 Order (see
above). In particular, treated transfer station waste residues cannot
be described as material listed within Group 1. In all such cases the
standard rate should be applied.
Inspection of loads is the responsibility of the landfill site
permit holder. The inspection should ensure that the waste description
on the transfer note matches the material delivered to the site. In
determining whether the landfill operator has applied the appropriate
rate of Landfill Tax, HMRC will refer in particular to how the waste is
described on any waste transfer note that accompanied the waste to the
site and any other commercial documentation.
If HMRC discovers instances where landfill operators do not
hold appropriate evidence to support the lower rate of Landfill Tax,
they will make assessments to bring the under-declared tax into charge
and will enforce these assessments. Penalties may also be applicable in
5. Correction of errors
Section 15 of Notice LFT1 explains how to correct Landfill Tax
errors. Landfill site operators who deliberately fail to correct an
under-declaration of Landfill Tax, may be liable to a civil penalty for
dishonest evasion, a civil penalty for deliberate inaccuracy or
6. Further information
Where you are in any doubt about the correct Landfill Tax
treatment, please phone the Excise and Customs Helpline on 0845 010
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Article Published/Sorted/Amended on Scopulus 2012-05-21 08:32:36 in Tax Articles