Following the budget announcement on 18 March 2015, HM Revenue & Customs have released their Landfill Tax Briefing. The Briefing covers landfill tax, the Landfill Communities Fund (LCF), LCF reform in England, Wales and Northern Ireland, the devolution of landfill tax to Scotland from 1 April 2015 and the devolution of landfill tax to Wales from April 2018.
A summary of the points covered is below and the full briefing document is to the right hand side of this page.
Landfill tax
Rates
The Government announced in the Budget that legislation will be introduced in Finance Bill 2015 to increase the rates of landfill tax in line with the Retail Prices Index (RPI), rounded to the nearest 5 pence, for disposals of waste made, or treated as made, to landfill in England, Wales and Northern Ireland on or after 1 April 2016.
The Landfill Communities Fund (LCF)
Maximum percentage credit in 2015-16
The Government announced in the Budget that the potential value of the LCF for 2015-16 will be £59.4m of claimable tax credit in England, Wales and Northern Ireland. The value of the LCF has been reduced by the devolution of landfill tax to Scotland from April 2015 and to fund a one-off increase in funding to tackle waste crime.
To achieve the above value, the percentage credit that landfill site operators in England, Wales and Northern Ireland may claim against their annual landfill tax liability for LCF contributions made to environmental bodies (EBs) will change from 5.1 per cent to 5.7 per cent from 1 April 2015.
LCF Reform in England, Wales and Northern Ireland
Budget 2015 announced a consultation on LCF reform which is open for responses from 18 March to 10 June 2015. The consultation is available on the government website and on the right hand side of this page.
Payments made to ENTRUST by EBs for 2015-2016
EBs must pay a levy on the full contribution they receive from landfill site operators to the LCF regulator, ENTRUST, to fund its running costs. The EB levy for 2015-16 is 2.32 per cent.
Devolution of landfill tax to Scotland from 1 April 2015
From 1 April 2015, credit against UK Landfill tax for contributions to authorised EBs may only be claimed where it relates to projects in England, Wales and Northern Ireland.
There will be a two year transitional period, from 1 April 2015 until 31 March 2017, during which unspent funds held by EBs on 31 March 2015 can be spent on projects located throughout the UK, including in Scotland.
Devolution of landfill tax to Wales from April 2018
The Wales Act 2014 provides for landfill tax to be devolved to Wales. This is expected to take effect in April 2018. Further information will be provided on developments at a later date.