Guidance: Check if you need to pay Landfill Tax

Overview

You’ll have to pay Landfill Tax if you operate a landfill site that has a licence or permit authorising disposals in or on the land.

In England, this is under the Environmental Permitting (England and Wales) Regulations 2016 (as amended 2018).

In Northern Ireland, this is under:

• regulations under Article 4 of the Environment (Northern Ireland) Order 2002 (SI 2002 No 3153 (NI 7))
• waste management licence issued under Part 2 of the Waste Management and Contaminated Land (Northern Ireland) Order 1997 (S.I. 1997/2778 (N.I. 19))
• a licence corresponding to section 35 of the Environmental Protection Act 1990

Occasionally, the licence or permit holder for the landfill site is not directly involved with operating it. In these cases the ‘controller’ of the site is jointly and severally liable for Landfill Tax.

Apart from exemptions, you need to pay Landfill Tax on all material disposed of at your site.

You’ll need to register with HMRC if you need to pay Landfill Tax.

From 1 April 2018, a person who makes, knowingly causes or knowingly facilitates a disposal to be made at an unauthorised site, is also liable to pay Landfill Tax.

More information about Landfill Tax and unauthorised sites can be found at Excise Notice LFT1: a general guide to Landfill Tax.

Taxable activities

All material placed within a landfill cell is liable for Landfill Tax subject to a number of exceptions.

A landfill cell is where most of the disposal activities take place on a landfill site. It may be a geological feature (such as a disused mine) or an engineered unit created on the landfill site. The landfill cell will be delimited by an impermeable layer at its base, sides and at the top of the structure (except where the cell only contains inert material).

The impermeable layer itself is not part of the cell and therefore does not constitute material placed in the cell.

There are some circumstances where material placed within a landfill cell is excepted from the charge to Landfill Tax. The following are not liable for Landfill Tax:

• the use of material to construct a permanent cap, which functions as an impermeable layer, at the top of a landfill cell when disposal operations have concluded
• the use of material that forms a layer which performs the function of drainage, located immediately above the impermeable layer at the base of a landfill cell
• the use of material to construct any pipe, pump or associated infrastructure within a landfill cell for the purposes of the extraction or control of surplus liquid or gas from or within the cell
• the use of material that meets all the conditions of one of the Landfill Tax exemptions set out in Excise Notice LFT1: a general guide to Landfill Tax

Soft material, for example household waste, that is placed to prevent damage to infrastructure within a landfill cell is taxable. Such material may have been sorted or processed to remove sharp or hard objects.

There are certain uses of material on a landfill site, outside of the landfill cell, that are liable for Landfill Tax. These are set out in the table in Excise Notice LFT1: a general guide to Landfill Tax.

Column C provides further detail about the taxable activities and column D sets out related activities that are not taxable.

Rates

The following are the 2 different rates of Landfill Tax:

• less polluting material as listed in the Landfill Tax (Qualifying Material) Order 2011 — £3.25 per tonne
• all other wastes — £102.10 per tonne

Loss on Ignition (LOI) testing regime

The ‘Loss on Ignition’ (LOI) testing regime was introduced on 1 April 2015 to improve compliance by helping prevent mis-description of waste fines for Landfill Tax purposes.

If your landfill site accepts waste fines, you may need to carry out a loss on ignition test to help determine the rate of tax to pay.

From 1 April 2015 to 31 March 2016:

• if the LOI is 15% or less, the lower rate is charged
• if the LOI is more than 15% the standard rate is charged

From 1 April 2016:

• if the LOI is 10% or less, the lower rate is charged
• if the LOI is more than 10% the standard rate is charged

More information on the LOI testing regime and details of all tax rates can be found at Excise Notice LFT1: a general guide to Landfill Tax.

Mixed loads

You’ll normally pay the standard rate for mixed loads, unless there’s an incidental amount of standard material in a mainly lower rate load. For example:

• sub-soil with small quantities of grass
• sub-soil and stone from street works containing tarmac
• mineral dust packaged in polythene bags
• bricks, stone and concrete with small amounts of wood and plaster

You need to justify any decisions you make to apply the lower rate to mixed loads. This will usually be based on the size of the standard rated material it contained and the difficulty in separating it from the rest of the load.

Exemptions and claiming back tax

The following disposals are exempt from Landfill Tax, provided that all the required circumstances are met:

• dredgings — material removed from water
• mining and quarrying material
• pet cemeteries
• filling of quarries
• waste from visiting forces

You can also claim back Landfill Tax you have previously paid when:

• a customer is unable to pay you (bad debt)
• material you accept is later removed to another landfill site
• landfilled material is later removed for recycling, incineration or re-use