Administration Costs and Unspent Funds

In accordance with the Landfill Tax Regulations 1996 (Regulations), ENTRUST is required to satisfy itself that Landfill Communities Fund (LCF) monies are spent compliantly. Further to this HM Revenue & Customs (HMRC) has set, as two of its strategic priority objectives for the LCF:

  • The level of administration costs incurred by Environmental Bodies (EBs), should be at or below the guidance level of 7.5 per cent of project expenditure; and
  • The value of unspent funds held by EBs should be reducing year on year.


To ensure that we support HMRC in delivering these priorities we have developed a framework for reviewing, monitoring and managing the level of administration costs and unspent funds which consolidates and formalises our previous activities in these areas.

The framework was originally published in November 2018 and updated in January 2021. You can access the framework from the right hand side of this page.

The framework is based on the analysis of Statutory Annual Returns (Form 4s) carried out at the end of each reporting year. It is hoped the framework will help to address the remaining small number of EBs who fail to meet guidance in relation to administration costs and unspent funds.

ENTRUST provides HMRC with an annual report on the findings of our analysis and the overall progress of the sector in these two areas. The relevant guidance is set out below and is also contained within our Guidance Manual which can be found in the Guidance section of the website.

Administration Costs

Regulation 30(1) defines running costs as those 'incurred in connection with the management and administration of an EB or its assets.' Running costs should be reasonable and relevant to the administration of the LCF and not exceed 7.5 per cent of the organisation's actual funding spent during the year on LCF project expenditure. For the purpose of monitoring EB Administration Costs, the definition of LCF project expenditure includes the total of funds spent via three methods:

1. An EB's compliant expenditure of LCF monies on projects for which they hold approval.

2. An EB's compliant expenditure of LCF monies on projects where another EB holds the approval.

3. An EB's compliant expenditure in transferring LCF monies to other EBs.

Unspent Funds

Unspent funds are those LCF funds remaining in an EBs bank account at the end of each reporting period. EBs are required to state within their Annual Return whether these funds are committed to projects or retained for winding up, any other funds are classed as uncommitted. Current guidance requires that an EB's total unspent funds at year end should be no more than 1.5 times an EB's LCF income (including contributions and transfers) in that year.