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Landfill tax escalated for fifth year in a row.

Landfil sites reduce recycling rates

With a view to incentivising local authorities and businesses alike into developing recycling and recovery infrastructure, landfill tax has been escalated for a fifth year in a row. The rise from the 2011/12 rate of £56 per tonne represents the fifth consecutive year that the tax has risen by an ‘escalator’ of £8. This escalator is set to rise again next year, with a floor under the 2014 rate of £80 per tonne until 2020.

In his Budget statement last month, Chancellor George Osborne confirmed that Landfill Tax would continue to rise year on year, reaching £64 per tonne this financial year and hitting £72 per tonne in April 2013.

The Chancellor also confirmed that the lower rate of landfill tax which applies to inert material, would remain frozen at £2.50 per tonne, the level that it reached in 2008. This rate is to remain at its current level in 2013-14, but it is unclear whether there will be further changes in later years.

The Budget also lowered the contributions landfill operators can make to environmental bodies under the Landfill Communities Fund. Previously landfill operators were required to contribute 6.2% of their landfill tax liability but, but the amended rate, which also came into effect yesterday, has been set at 5.6%.

In his 2012 Budget statement, the Chancellor said: “The value of the landfill communities fund for 2012–13 will remain unchanged at £78.1 million. As a result, the cap on contributions by landfill operators will be amended to 5.6 per cent. Future decisions on the value of the fund will take into account the level of unspent funds held by environmental bodies.”

April 1 also marks the end of the exemption from landfill tax for waste arising from the reclamation of contaminated land. The move was announced in October 2008, and is expected to raise around £40 million in additional revenue for the treasury As a result, any such waste now sent to landfill will be subject to landfill tax at the appropriate rate.

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