From 1 April 2018, Landfill Tax is changing to include disposals at unauthorised waste sites in England and Northern Ireland. These changes will support legitimate waste management businesses by creating a fairer tax system and a deterrent to causing environmental harm by disposing of material at an unauthorised waste site.
This has always been an environmental crime; however, until now material disposed of at unauthorised waste sites has not been subject to Landfill Tax. With no Landfill Tax to pay, rogue operators were able to undercut legitimate operators and make significant profits, at the expense of both the legitimate trade and the environment.
These sites, which ought to have an environmental permit or licence for disposals but do not, will now be within the scope of Landfill Tax. This will allow for far stronger penalties against rogue operators and those using these sites to dump their waste. From 1 April, HMRC can tax any person or business who makes a disposal at an unauthorised waste site, or knowingly causes or permits the disposal may be liable for Landfill Tax, and a penalty of up to 100% of the tax due, and face criminal prosecution.
David Richardson, Director General, HMRC said:
“For too long fraudsters have dodged paying tax and dumped waste in illegal sites. These greater powers announced today will hit criminals where it hurts the most – their pockets – and help keep our countryside clean.”
HMRC will work closely with the Environment Agency, Northern Ireland Environment Agency, the Police and other partners to take action against those that continue to operate outside of the law.
Sir James Bevan, Chief Executive of the Environment Agency, said:
“The message is clear: waste crime does not pay. Those who seek to damage the environment and blight communities by dumping waste irresponsibly will be made to foot the bill for their crimes.”
This measure come on top of cross government work to protect the environment. On the same day, DEFRA is announcing the councils will have the power to almost double maximum on-the-spot fines for littering and graffiti from £80 to £150, showing that whether people are littering on a small or a large scale the penalties are high.
Landfill Tax was introduced on 1 October 1996 as a disincentive to landfilling material and to encourage the switch to more environmentally friendly alternatives. Since the introduction of the tax in the UK, landfilling is down more than 60%.
The Environment Services Association estimates that waste crime costs the English economy over £600m annually, with up to £200m of tax being dodged.
At Spring Budget in 2017, the government published a consultation on this which was met with widespread support.
These changes only apply to England and Northern Ireland, as the tax was devolved to Scotland on 1 April 2015, and will be devolved to Wales from 1 April 2018. Both the Scottish and Welsh governments have provisions to tax unauthorised waste sites in their legislation.
From today (1 April) the Welsh Revenue Authority will be administering Landfill Disposals Tax which replaces Landfill Tax in Wales. Visit the gov.wales/WRA for more information and to register
Where material is disposed of at an unauthorised waste site before 1 April 2018, and is still present on 1 April 2018, anyone who made, was knowingly involved in, or knowingly permitted, the disposal may be liable for Landfill Tax. However, they won’t be liable for a Landfill Tax penalty if they notify HMRC of the disposal before 1 May 2018. They can report the disposal by writing to HMRC and include – the location of the disposal, the type and weight of material and their contact details. This does not prevent further regulatory or enforcement action being taken by the Environment Agency, Northern Ireland Environment Agency, the police or another enforcement authority.
Businesses that manage their waste in compliance with environmental regulations, and exercise all reasonable due diligence, will not be liable for any Landfill Tax on disposals made at unauthorised waste sites. HMRC expect businesses in England to check their waste contracts to ensure they are complying with the Defra Waste Duty of Care Code of Practice, and businesses in Northern Ireland to check their contracts comply with the DAERA Waste Duty of Care Code of Practice.
If you suspect waste crime, report it. You can report waste crime anonymously by calling Crimestoppers on 0800 555 111, or online.
If you think someone is evading tax, report it via the Tax Evasion Hotline on 0800 788 887 or online.
Legitimate waste companies, local authorities and businesses also have a responsibility to check what happens to their waste. They must make sure that they know what their legal responsibilities are by reading our updated guidance on GOV.UK https://www.gov.uk/topic/business-tax/landfill-tax
From 1 April 2018, anyone involved in operating and knowingly making use of illegal waste sites, from waste producers to the illegal waste site operators, will be jointly and severally liable for Landfill Tax on the material at the standard rate of £88.95 per tonne. Those involved in the illegal disposal could also be liable to a penalty of up to 100% of the tax due, or face criminal prosecution.
HMRC will work closely with the Environment Agency, Northern Ireland Environment Agency, the Police and other partners to put a stop to waste crime which harms the environment and legitimate operators.