HM Revenue and Customs Brief 02/14
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Issued 23 January 2014
Landfill tax: HM Revenue and Customs' approach to claims for
repayment of tax
1. Purpose of this Brief
This brief is for landfill site operators and their advisers.
It gives information about a change in HM Revenue & Customs'
(HMRC) approach to claims for repayment of landfill tax following the
judgment of the Court of Appeal in Commissioners for HMRC versus Waste
Recycling Group (WRG) Limited  EWCA Civ 849.
On 22 July 2008, the Court of Appeal ruled in favour of WRG in
their action relating to landfill tax. The Court found that where
material received on a landfill site is used on the site for the daily
coverage of sites required under environmental regulation and
construction of on-site haul roads, it is not taxable as it was not, at
the relevant time, being disposed with the intention of discarding it.
HMRC initially interpreted the judgment as meaning that any
materials put to use on a landfill site were not taxable. It published
Revenue and Customs Brief 58/08 in December 2008 inviting claims for
repayment of tax in accordance with this view.
Revenue and Customs Briefs 15/12 and 18/12, published in May
and June 2012 respectively, provided further clarification of the
circumstances in which HMRC would consider claims for repayment of tax.
In both briefs 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
HMRC's decision to treat this so-called 'reverse or top fluff'
as material liable to landfill tax has been challenged by some landfill
site operators who have appealed HMRC's decision to the First Tier Tax
Tribunal. A hearing is now pending.
In preparation for such an appeal, HMRC has reviewed its
approach to claims received relating to the WRG judgment. The decision
to undertake a review was also influenced by the increasing number of
claims from some landfill operators that have cited this judgment to
challenge the boundaries of landfill tax legislation.
HMRC's review considered a wide range of information on claims
that had been made following WRG and also reviewed HMRC's previous
decisions to repay claims in relation to material referred to as 'base
and side fluff'. As a result of the review, HMRC is today announcing
changes in how such claims will be handled.
3. Outcome of HMRC's review of claims for repayment of tax
following the WRG case
The review concluded the following:
All fluff claims
- the principle of 'use' applies only to the specific
circumstances in the WRG case
- all types of fluff (whether 'side', 'base' or
'reverse/top') are, and always have been, taxable under primary
legislation as it is waste permanently discarded to landfill
- the WRG case does not provide a precedent that waste
'used' within a landfill site is not taxable
- HMRC has found no evidence to suggest that fluff layers
fulfil any engineering purpose or are a regulatory requirement
- there is no difference between the various types of fluff
in physical composition. They are all simply carefully placed and
Side and base fluff' claims only
- HMRC will make no further payments of such claims
- HMRC will not seek to reclaim any payments it has
Reverse or top fluff' claims only
- any claims for repayment of tax in respect of 'reverse or
top fluff' will be resisted by HMRC
- it cannot be inferred from payment of any 'base and side
fluff' claims in the past that HMRC accept that material was being
used, nor can any favourable inferences be drawn in the case of
'reverse or top fluff' from the fact that these payments were made
HMRC will continue to reject any claims based on the
contention that waste disposed to landfill is being used to produce gas
for electricity generation.
4. Further information
If you are in any doubt about the correct landfill tax
treatment, please phone the Environmental Taxes Unit of Expertise on
Telephone: 03000 557028.
About the Author
© Crown Copyright 2014.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
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Article Published/Sorted/Amended on Scopulus 2014-01-27 14:08:19 in Tax Articles