Budget Announcement
Wednesday, 16 March 2005
The Chancellors speech increased the level of LFTC's up to nearly £50m.
The standard rate of landfill tax will be increased from £15 per tonne to £18 per tonne. The £18 per tonne rate applies to any standard rated disposal of waste made, or treated as made, on or after 1 April 2005. The lower rate of tax, which applies to inactive wastes disposed at landfill, as listed in the Landfill Tax (Qualifying Material) Order 1996, remains unchanged at £2 per tonne.
The percentage credit that landfill site operators may claim against their annual landfill tax liability, for contributions made to bodies with objects concerned with the environment, enrolled under the Landfill Tax Credit Scheme, is to be changed from 6.8 per cent to 6.0 per cent. The change will come into effect at the start of the new landfill tax contribution year, 1 April 2005.
Taken together, the changes to the standard rate of landfill tax and to the proportion that can be reclaimed under the Landfill Tax Credit Scheme, result in an increase in the value of the scheme in line with inflation, from £48.3 million in 2004-05 to £49.7 million in 2005-06. Please note that ALL current landfill tax contribution years end on 31 March 2005.
In order to utilise any remaining entitlement to credit for this year, any contributions to environmental bodies for 2004/5 MUST be made by the due date of the return in which 31 March falls (i.e. 29 April for returns ending 31 March, 31 May for returns ending 30 April and 30 June for returns ending 31 May). Credit in respect of contributions made after these dates is not permissible and claims will be disallowed.
Landfill site operators whose accounting period covers time before and after 1 April will need to apportion their maximum percentage credit so that it reflects the different entitlements. They may calculate this precisely on the basis of their liabilities before and from 1 April 2005, or use a simplified calculation based on the number of days in the accounting period each side of 1 April 2005.
For example, if their accounting period covers March, April and May then they are entitled to a maximum percentage credit in respect of March of 6.8 per cent of their liability, while for April and May that entitlement is 6.0 per cent. Claims for credit should only be made in respect of contributions made on or before the due date of the current landfill tax return. Credit in respect of contributions you anticipate making are not permissible and claims will be disallowed.