With effect from the 02 April 2015, HMRC has agreed two new conditions in relation to the Regulation of the Landfill Tax Regulations 1996 (Regulations).
These conditions have been implemented to:
- manage those projects which over-run their planned completion dates, which will help LCF monies to be spent more quickly; and
- freeze the status of those Environmental Bodies (EBs) who fail to submit an annual return.
Project completion dates
At the project application stage, EBs are required to provide an estimated start and end date for that project. However, we have identified that in a number of cases projects have overrun beyond the specified end date. The consequences of projects over-running can be that EBs hold LCF monies for longer periods of time, which ultimately delays the speed at which funding is distributed to local communities and may also increase a project costs.
HMRC have therefore approved a new condition which addresses this problem by restricting project approval to the period specified on the project registration form. This means that no LCF monies can be spent on a project after the agreed project end date, without applying to ENTRUST for an extension to the estimated project completion date. Failure to comply with this condition will mean that any project spend after the authorised completion date, will be deemed as non-compliant spend.
Freezing of Environmental Body status
It is a statutory requirement for all EBs to submit a Form 4 Annual Return by 28 April each year. However, a number of EBs have continually failed to comply with this requirement. To address this issue HMRC have approved a condition which freezes the status of those EBs who fail to submit their statutory annual return by 28 April.
Once an EB is frozen it would not be able to receive further funds, or spend funds until all outstanding annual returns are submitted. The frozen status would be removed once all outstanding returns have been received.
Details of those EBs who have been frozen will be published on ENTRUST’s website so that other EBs can ensure that they do not transfer funds to a frozen EB – an action which would result in them also becoming non-compliant.