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HMRC publish further guidance on landfill tax
HMRC has published ‘interim advice’ on landfill tax in order to provide further clarity to the changes that were announced on 18 May.
This is the third piece of clarification HMRC has published on the changes to the landfill tax after ‘widespread misunderstanding’ of the original brief led to angry protests from waste disposal companies.
In order to combat this, HMRC has now released ‘interim advice’ following meetings with the new trade body for the UK’s skip hire and waste transfer companies, the United Resource Operators Consortium (UROC, founded 20 June), the Environmental Services Association and the Environment Agency.
This newest guidance covers what is needed for materials to qualify for the lower rate of landfill tax at £2.50 a tonne (opposed to the higher rate of £64 a tonne). ‘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’, says the document. The guidance does also say, however, that an ‘incidental amount of non-qualifying material’ in waste consignments can still qualify for the lower rate, though does not quantify how much is considered ‘incidental’.
The guidance goes on to clarify that the ‘only determining factor as to whether waste is lower rated is whether it is listed in the Landfill Tax (Qualifying Material) Order 2011. Whether or not waste is considered to be inert for environmental protection purposes is not relevant to matters of tax liability. Equally, the fact that waste is listed in the Landfill Tax (Qualifying Material) Order 2011 does not mean that the waste is inert for environmental protection purposes.’
HMRC has said that it is now working with the industry to provide further guidance on a number of issues, including:
- The definition of ‘naturally occurring’ in Group 1 of the 2011 order
- More objective evidential requirements, including those relating to ‘incidental’ amounts of non-qualifying material in a load that is essentially of qualifying material
- Guidance on the conditions that must be met where lower-rated waste, used for the purposes of filling existing or former quarries, qualifies for exemption from Landfill Tax.
HMRC expects to produce a draft of the new policy guidance before the end of the summer.
You can read the 'interim advice' on HMRC's website.
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