A general guide to Landfill Tax

HMRC Reference:Notice LFT1 (April 2014) View Change History
 

Contents

Foreword

1 Introduction

1.1 What is this notice about?

1.2 What has changed?

1.3 Who should read this notice?

2 Scope of the tax

2.1 What do I have to pay Landfill Tax on?

2.2 What is disposal of material as waste?

2.3 What is a disposal by way of landfill?

2.4 Which landfill sites are relevant for tax?

2.5 Which landfill site activities are prescribed as being subject to tax?

2.6 Who is liable to pay Landfill Tax?

3 Rates of tax

3.1 Two rates of tax

4. Exemptions

4.1 Dredgings - material removed from water

4.2 Mining and quarrying waste

4.3 Pet cemeteries

4.4 Filling of quarries

4.5 Waste from visiting forces

5 Calculating the weight of waste

5.1 Sites with a weighbridge

5.2 Sites without a weighbridge

5.3 Specified methods for sites without weighbridges

5.4 Specified method one: maximum permitted weight of container

5.5 Specified method two - volume to weight conversion

5.6 Specified method three - weighing the waste prior to receipt at the site

6 Tax points

6.1 What is the tax point?

6.2 What information must be on Landfill Tax invoices?

7 Information areas

7.1 What is an information area?

7.2 Designating an area as an information area

7.3 Boundaries

7.4 Weighing waste

7.5 Information area account

7.6 Breach of conditions

8 Bad debt relief

8.1 When am I entitled to bad debt relief?

8.2 What records are required to claim bad debt relief?

8.3 How much can I claim?

8.4 How do I claim bad debt relief?

8.5 What if I subsequently receive a payment from my customer?

9 Credit for waste removed to another landfill site

9.1 When can I claim a credit of Landfill Tax?

9.2 What records are required to claim the credit?

9.3 How much can I claim?

9.4 How do I make a claim?

10 Credit for landfilled waste later removed for recycling, incineration or re-use

10.1 When can I claim a credit of Landfill Tax?

10.2 What records are required to claim the credit?

10.3 How much can I claim?

10.4 How do I make a claim?

11 Landfill Communities Fund (LCF)

11.1 Introduction to the scheme

11.3 Enrolled environmental bodies

11.4 Approved objects for the scheme

11.5 Calculating your Landfill Tax liability?

11.6 Contribution years

11.7 Claiming tax credits

11.8 Circumstances affecting entitlement to credit

11.9 Summary of a landfill site operator's responsibilities under the scheme

11.10 Revocation of environmental bodies

12 Registration

12.1 Who has to be registered for Landfill Tax?

12.2 Registration process

12.3 What if I operate more than one landfill site?

12.4 Transfer of a business as a going concern

12.5 Conditions of group treatment

12.6 Can a company be registered in divisions?

12.7 Registration forms

12.8 How do I notify changes?

12.9 How do I deregister?

12.10 How do I claim a credit of Landfill Tax after I have de-registered?

12.11 Publication of the Landfill Tax register

13 Accounting for tax

13.1 How do I account for the tax to you?

13.2 What does the return look like?

13.3 What is the value for VAT?

13.4 How do I pay?

13.5 Paying in euro

13.6 Further information about how to pay Landfill Tax

14 Records

14.1 What records must I keep?

14.2 For how long must I preserve my records?

14.3 How may I store my records?

14.4 When must I produce my records?

15 Errors found in records

15.1 What if I find errors in my Landfill Tax records?

15.2 What if I record or calculate my Landfill Tax incorrectly?

15.3 Correcting Landfill Tax errors on a return already submitted

15.4 What if the errors mean that I have overpaid tax?

16 Penalties and interest

16.1 Failure to register or deregister

16.2 Failure to notify us about a controller of a landfill site

16.3 Failure to preserve records

16.4 Failure to produce information and records

16.5 Failure to comply with the regulations

16.6 Controlled goods agreement

16.7 Penalties and interest on under-declared tax

16.8 Penalty interest

16.9 Evasion of tax

16.10 Error corrections

16.11 Mitigation of penalties

16.12 Reasonable excuse

16.13 When we will pay you interest

16.14 Security for the tax

16.15 Criminal offences and civil penalties

17 Reviews and appeals

17.1 Can I request a review of or appeal a decision?

17.2 Scope of the review/appeal procedure

17.3 Where can I get more information about reviews and appeals?

18 Summary of the Landfill Tax (Qualifying Material) Order 2011

19 Example of a completed landfill invoice

20 Landfill tax return and completion notes

Your rights and obligations

Do you have any comments or suggestions?

Putting things right

How we use your information

 

Foreword

This notice cancels and replaces Notice LFT1 (July 2013).

1 Introduction

1.1 What is this notice about?

This notice provides a general guide to Landfill Tax. This is a tax on the disposal of waste to landfill. As such, it encourages efforts to minimise the amount of waste produced and the use of non-landfill waste management options, which might include recycling, composting and recovery.

This notice deals with requirements under Landfill Tax legislation. Nothing in this notice changes your obligations under environmental law.

1.2 What has changed?

We have amended the notice to reflect legislative changes impacting HMRC's walking possession agreements. The change to the content is in the following part of the notice:

Paragraph/Section


Content


Paragraph 16.6


Walking possession agreements


   
   
   

Unless otherwise specified, references in this notice to 'sections' or 'paragraphs' are to the named section or paragraph in this notice.

1.3 Who should read this notice?

This notice is primarily for landfill site operators but will also be of interest to waste producers, others involved in the waste management industry and environmental bodies under the Landfill Communities Fund. Where we refer to site operators in this notice we mean the licence or permit holder of the landfill site (see paragraph 2.4).

Unless indicated to the contrary, where we say 'you' or 'your' in this notice, we mean the landfill site operator and where we say 'we', 'our' or 'us' we mean HM Revenue & Customs (HMRC).

1.4 What legislation covers this notice?

The primary legislation on Landfill Tax and the Landfill Communities Fund is contained in the Finance Act 1996 (sections 39 to 71 inclusive, and Schedule 5), as amended. This Act also provides for the following secondary legislation:

  • the Landfill Tax Regulations 1996 (SI 1996 No. 1527), as amended - deal with the more detailed implementation aspects of the tax, such as registration, information gathering requirements and accounting procedures, and cover the Landfill Communities Fund (see section 11 below)
  • the Landfill Tax (Qualifying Material) Order 2011 (SI 2011 No. 1017), as amended - defines the categories of waste to which the lower rate of tax applies, and
  • the Landfill Tax (Prescribed Landfill Activities) Order 2009 (SI 2009 No. 1929) – lists certain activities on a landfill site that are subject to tax.

The Landfill Tax return (form LT100 Landfill Tax Return) is no longer determined by legislation and is instead determined by section 20 of this notice.

2 Scope of the tax

2.1 What do I have to pay Landfill Tax on?

Unless it is specifically exempt (see section 4), Landfill Tax applies to all material disposed of:

  • as waste (see paragraph 2.2)
  • by way of landfill (see paragraph 2.3), and
  • at a landfill site that covered by a licence or permit under specific environmental legislation (see paragraph 2.4).

It also applies to the prescribed landfill activities relating to use of material on site that are listed in paragraph 2.5 (subject to the site being covered by paragraph 2.4).

2.2 What is disposal of material as waste?

A disposal of material is a disposal of it as waste if the person making the disposal does so with the intention of discarding the material.

In 2008, the Court of Appeal in the Commissioners for Her Majesty's Revenue & Customs v Waste Recycling Group Limited [2008] EWCA Civ 849, (the WRG case), ruled to the effect that material received on a landfill site which is put to a use on the site is not taxable. This is because there is not, at the relevant time, a disposal with the intention of discarding the material. However, legislation which came into effect on 1 September 2009 brought prescribed 'landfill site activities' relating to use of material on site into the scope of the tax (see paragraph 2.5).

2.3 What is a disposal by way of landfill?

Disposal of waste by way of landfill takes place where material is deposited:

  • on the surface of the land
  • on a structure set into the surface of the land, or
  • under the surface of the land (land includes land covered by water which is above the low water mark of ordinary spring tides).

Whether the material is placed in a container before it is deposited is irrelevant. It is still a disposal for the purposes of the tax if the material is covered with earth or similar material straight away or if it is deposited in a cavity such as a cavern or mine. If material is deposited with a view to being covered at a later stage with earth, the disposal is made when the material is deposited, not when it is covered.

2.4 Which landfill sites are relevant for tax?

A site is relevant for the purposes of the tax if there is a licence or permit authorising disposals in or on the land under:

  • Part II of the Environmental Protection Act 1990
  • Regulations made under section 2 of the Pollution Prevention and Control Act 1999
  • Part II of the Pollution Control and Local Government (Northern Ireland) Order 1978 (SI 1978 No. 1049 (N.I. 9)), or
  • Regulations under Article 4 of the Environment (Northern Ireland) Order 2002 (SI 2002 No. 3153 (N.I. 7)).

Any material which is deposited at a site which is not subject to a waste management licence or permit under environmental law is not liable to tax.

2.5 Which landfill site activities are prescribed as being subject to tax?

The prescribed landfill site activities referred to in paragraphs 2.1 and 2.2 are set out in column B of the following table. They are subject to tax on or after 1 September 2009. Column C provides further detail about the taxable activities and column D sets out related activities that are not taxable.

While no tax is due on waste which is subject to processing or sorting in the area of a landfill site prior to the waste being subject to recovery, tax will be due if the site operator does not supply us with the information described in section 7 (requirements of an information area account).

Column A


Column B


Column C


Column D


Activity number


Description


What is taxable


What is not taxable


1


The use of material to cover the disposal area during a short-term cessation in landfill disposal activity. The disposal area, usually the landfill void, is any area where disposals of material as waste and by way of landfill take place (see paragraphs 2.2 and 2.3).


The placing of any material on the disposal area for mainly health or environmental reasons (such as reducing nuisance and disturbance by vermin, birds or insects) as opposed to for engineering reasons (such as the exclusion of water). This placing of material may be described as 'daily cover'.


The use of mineral material, including clay:


  • as a permanent cap or geological barrier on the bottom or sides of a disposal area, and
  • as a permanent cap on the top of the disposal area on completion of landfilling operations (an engineered layer used to stop ingress of water into the finished landfill).

The use of material that meets all the conditions of one of the Landfill Tax exemptions set out in section 4.


2


The use of material to create or maintain a temporary haul road


The use of material for the construction or maintenance of roads, either within the disposal area or adjacent to it. Such roads do not have engineered features (which may include kerbs or drains) and may be made from crushed or re-used materials, such as concrete or tarmac and may be eventually subsumed into the landfill site.


The use of material for construction or maintenance of permanent site roads. These have engineered features (which may include kerbs or drains) and have a surface that is prepared and/or finished. Permanent site roads are likely to have been constructed prior to the start of tipping operations on the site.


The use of material that meets all the conditions of one of the Landfill Tax exemptions set out in section 4.


3


The use of material to create or maintain temporary hard standing


The use of material for the construction or maintenance of a base on which activities such as waste recycling or treatment take place. Such bases do not have engineered features (which may include sealed drainage) and may be made from crushed or re-used materials, such as concrete or tarmac and may be eventually subsumed into the landfill site.


The use of material for construction or maintenance of permanent hard standing. These have engineered features (which may include sealed drainage) and have a surface that is prepared and/or finished. Permanent hard standing is likely to have been constructed prior to the start of tipping operations on the site.


The use of material that meets all the conditions of one of the Landfill Tax exemptions set out in section 4.


4


The use of material to create or maintain a cell bund


The use of material to form a structure within the disposal area to separate units of waste, for example, to identify the operational area.


The use of mineral material, including clay, to form separate cells on the edge of the landfill as part of the engineered containment.


The use of material that meets all the conditions of one of the Landfill Tax exemptions set out in section 4.


5


The use of material to create or maintain a temporary screening bund


The use of any material to create or maintain a structure, either below or above ground, with the purpose of reducing the visual or noise impact of discrete activities on a landfill site, where those activities will cease, while the wider site continues to operate.


The use of material to create or maintain a structure that performs a function in relation to the landfill site as a whole. It is likely that this will be in place during the entire period of operation of the site as a whole.


Naturally occurring material derived from the site it is used at, when used to create or maintain a temporary screening bund.


The use of material that meets all the conditions of one of the Landfill Tax exemptions set out in section 4.


6


The use of material placed against the drainage layer or liner of the disposal area to prevent damage to that layer or liner


The placing of soft material, for example household waste, to prevent damage to the drainage layer/blanket or the liner. Such material may have been sorted/processed to remove sharp or hard objects.


The use of material that meets all the conditions of one of the Landfill Tax exemptions set out in section 4.


7


The temporary storage of ashes (including pulverised fuel ash and furnace bottom ash)


The storage of ashes from power generation in a facility, such as a lagoon, designed so that the ashes can be retrieved for use or for permanent disposal.


The use of material that meets all the conditions of one of the Landfill Tax exemptions set out in section 4.


8


The restoration of a landfill site


The use of material (including site derived material) for site restoration purposes if you fail to notify us in writing of the intention to commence restoration or if the material is not deposited in the pre-notified area


The use of material (including site derived material) for site restoration purposes if you notify us in writing of the intention to commence restoration (see paragraph 2.5.2) and the material is deposited in the pre-notified area (see paragraph 2.5.1 regarding what is restoration).The use of material that meets all the conditions of one of the Landfill Tax exemptions set out in section 4.


For activities 1 to 6, tax is due regardless of whether the material was bought for the purpose or was otherwise obtained.

If material is used for the above activities and has previously been the subject of a taxable disposal, tax is due only on the material that has not borne tax. For example, of material used to cover waste, if 40% of the material has been taxed before and 60% is new material, tax is only due on the 60%.

Where material is taxable because it has been subjected to a landfill site activity which is temporary (activities 2, 3 and 5 in the table above) and that material is subsequently put to a non-taxable use (but not on a landfill site except when reusing it as restoration material), the credit provisions described in section 10 apply.

2.5.1 What is restoration?

Restoration is any work, which the planning consent, the waste management licence or permit authorising disposal of waste on or in the land require to be carried out after waste disposal operations, in order to restore the site to a condition suitable for non-landfill use.

This is not taxable providing:

  • you write to us at the address given in paragraph 6.1, notifying us of the intention to commence restoration of the whole or a part of the site and provide us with the information detailed in paragraph 2.5.2 below
  • the restoration work takes place after notification has been given and the information has been provided, and
  • the material is deposited on an area of the site which has been notified as being restored and is used in that area for restoration.

2.5.2 Notification

You must notify us of your intention to commence restoration prior to doing so. You must also ensure that we have received your notification before any material is deposited that may not be taxable under this prescribed activity. We will acknowledge your notification, but this will not imply acceptance that the material is not taxable. You are responsible for deciding whether any particular deposit of material qualifies as not taxable and to retain such evidence as is necessary to satisfy us that it was properly not taxable.

You must include in your notification:

  • your Landfill Tax registration number
    - your registered name and address and the name, address and waste management licence/permit number of the landfill site to which the notification relates (separate notifications for each site)
  • whether the notification is for full or part restoration of the site
  • evidence to demonstrate that you are required to restore this landfill site, such as a copy of the planning consent specifying the requirement to restore
  • a scaled drawing or plan of the area(s) under restoration
  • an estimate of the total tonnage of material needed to restore the area(s) included in your notification. You should deduct from this total any material on site that you have retained for this restoration and provide full details of how you have calculated the weight of the total of site restoration material
  • evidence to demonstrate why you require the notified tonnage. Such evidence could include:
    - waste management licence/permit/working plan
    - plan of the area subject to this notification
    - correspondence with the environmental regulator, and
    - extracts from any tender/restoration contract
  • the date you expect to commence restoration (notification should not be made more than six months prior to commencement), and
  • an estimate of the timescale of this restoration project.

2.6 Who is liable to pay Landfill Tax?

2.6.1 The landfill site operator

You are liable to pay tax on a taxable disposal if you are the licence or permit holder for a landfill site.

If you operate a licensed or permitted landfill site, any waste deposited in it, including waste which you have produced, will be liable to tax unless it is exempt from tax. This includes in-house sites where waste producers dispose of their own waste.

2.6.2 The controller of the landfill site

In some cases, the licence or permit holder for the landfill site has no direct involvement in operating the site. Where this is the case, the liability to pay tax is extended to the 'controller' of the site. This means that if the person named on the licence or permit fails to pay the tax, the controller will be jointly and severally liable for the debt.

The controller of a landfill site is a person, other than the licence or permit holder, who determines what materials (if any) are disposed of at the site, or part of the site. A person who is purely acting as an agent or employee of someone else is not a controller.

The controller of the site must notify us that they are the controller but does not have to register for Landfill Tax – that remains the responsibility of the site operator. If a person becomes, or ceases to be a controller, both you and the controller must notify us within 30 days of the change. If you both fail to do so then that person is liable to a penalty of £250 (see paragraph 16.2). Notifications about becoming, or ceasing to become, the controller must include the:

  • name and (if different) trading name of the operator and controller
  • Landfill Tax registration number of the operator
  • address of the landfill site for which there is a controller
  • VAT registration number (if applicable) of the controller
  • address (including postcode) of the principal place of business in the UK of the controller
  • phone number of the controller, and
  • date the controller became, or ceased to be, a controller at the site named.

You should send the notification to the Central Collection Unit at the address in paragraph 12.8.

3 Rates of tax

3.1 Two rates of tax

The tax is chargeable by weight and there are two rates:

  • the lower rate applies to those less polluting wastes listed in the Landfill Tax (Qualifying Material) Order 2011, as amended, summary of which is set out in section 18, and
  • the standard rate applies to all other taxable waste.

The following table summarises the rates of tax since the introduction of the tax in October 1996:

Date of change


Standard rate
(£ per tonne)


Lower rate
(£ per tonne)


01.10.96


7


2


01.04.99


10


2


01.04.00


11


2


01.04.01


12


2


01.04.02


13


2


01.04.03


14


2


01.04.04


15


2


01.04.05


18


2


01.04.06


21


2


01.04.07


24


2


01.04.08


32


2.50


01.04.09


40


2.50


01.04.10


48


2.50


01.04.11


56


2.50


01.04.12


64


2.50


01.04.13


72


2.50


01.04.14 (see note 1)


80


2.50


Note 1: Budget 2010 announced that the standard rate of Landfill Tax would increase by £8 per tonne each year from 1 April 2011 until at least 2014. There will be a floor under the standard rate, so that the rate will not fall below £80 per tonne from 2014-15 to 2019-20.

3.2 Evidence for lower rate

You must keep sufficient evidence to substantiate applying the lower rate of tax to any particular disposal of waste.

To qualify for the lower rate the waste transfer note, which is required to accompany most movements of waste in the UK, must accurately describe the waste so that it can be related to the terms used in the Landfill Tax (Qualifying Material) Order 2011. The waste transfer note may cover individual loads or it may be a 'season ticket' covering a number of loads sent for disposal to your site over a period of time.

If you operate an in-house site and have applied the lower rate to waste which you have disposed of in that site you will need to provide evidence that the waste qualifies for that rate.

The requirements relating to the waste transfer note described above are for tax purposes. They in no way override or affect your obligations in relation to the waste transfer note in environmental protection law including the requirement to define the waste source by reference to the European Waste Catalogue codes.

Note: the only determining factor as to whether waste is lower rated is whether it is listed in the Landfill Tax (Qualifying Material) Order 2011. Whether or not waste is considered to be inert for environmental protection purposes is not relevant to matters of tax liability. Equally, the fact that waste is listed in the Landfill Tax (Qualifying Material) Order 2011 does not mean that the waste is inert for environmental protection purposes.

3.3 Mixed Loads

Where a disposal to landfill contains both standard rated and lower rated materials, tax is due on the whole load at the standard rate. However, you may ignore the presence of an incidental amount of standard rated waste in a mainly lower rated load, and treat the whole load as taxable at the lower rate. For example, we would accept as qualifying for the lower rate:

  • a load of bricks, stone and concrete from the demolition of a building that has small pieces of wood in it and small quantities of plaster attached to bricks as it would have not been feasible for a contractor to separate them
  • a load of sub-soil that contains small quantities of grass
  • waste such as mineral dust packaged in polythene bags for disposal, and
  • a load of sub-soil and stone from street works containing tarmac (however, a load of tarmac containing soil and stone would not qualify).

It is not possible for us to advise you on every disposal. It is your responsibility to decide whether a particular load disposed of at your site contains a reasonable incidental amount of standard rated waste - you need to satisfy yourself that the load contains only a small quantity of such waste. The difficulty in separating the standard rated components from the lower rated waste is a factor that you can take into account, but this cannot be used to justify applying the lower rate of tax if the standard rated waste is more than a small amount of the total load. You will need to justify your decisions to us.

4. Exemptions

4.1 Dredgings - material removed from water

Waste removed from inland waterways and harbours by dredging and disposed of to landfill is exempt from Landfill Tax.

The circumstances under which dredging material qualifies for the exemption as originally introduced are shown below:

If ...


then ...


material is removed from the bed of the water (including the banks of canals and rivers) and has been dredged from:


  • a river, canal, watercourse, dock or harbour, or
  • the approaches to a harbour and removed in the interests of navigation.

(To qualify as a watercourse it must be possible to show that a body of water has a:


  • natural source of surface or underground water
  • flow, under the action of gravity
  • reasonably well defined channel of bed and banks, and
  • meeting point with another watercourse or tidal waters.)

the disposal will qualify for exemption.


Sand, gravel or other materials are extracted from the seabed as part of a commercial operation,


any naturally occurring substances which result from this operation that are disposed of to landfill will qualify for the exemption.


The exemption was extended from 30 October 2007 to ensure compliance with the European Council Directive (99/31/EC) on the landfill of waste. This Directive requires those landfilling waste removed from water either to add material to the waste or remove the water from it. Since 30 October 2007, the exemption has applied to disposals of waste where we are satisfied that all of the disposal comprises material removed from the bed of the water (including the banks) and other material which has been added to it in order to ensure that it is no longer liquid waste. Liquid waste is:

(i) any waste that immediately flows into a space made in its surface, or

(ii) any waste load containing more than 250 litres of free draining liquid or 10% of the load volume, whichever is the lesser amount. 'Free draining' means a liquid as defined in (i), whether or not it is in a container.

To qualify for the extended exemption, the additive used must have dehydrating properties or bind the excess moisture content within the waste and, in either case, produce a material that is not liquid waste. Additives such as sand and sawdust absorb liquid temporarily but release it again as waste is compressed within the landfill. Accordingly, these additives are not acceptable for the purposes of the exemption.

This extension to the scope of the exemption does not absolve waste producers and landfill site operators from fulfilling their obligations incurred under environmental regulations. If you have any doubts about those obligations, you should seek advice from:

  • the Environment Agency (for England and Wales)
  • the Scottish Environment Protection Agency (for Scotland), or
  • the Northern Ireland Environment Agency (for Northern Ireland).

You do not need a certificate from us to apply this exemption but you should keep commercial documents that show the source of the waste and, where relevant, the nature and effect of the treatment it has undergone.

4.2 Mining and quarrying waste

Waste arising from mining and quarrying operations and disposed of to landfill is exempt from Landfill Tax.

To qualify for exemption the waste must:

  • be naturally occurring in the course of a commercial mining or quarrying operation, including the reworking of tailings to extract further minerals. The term 'commercial' does not mean that a profit has to be made, but the operation has to be a business activity
  • have the same chemical composition as it had when it was in the ground, and
  • not be produced from a process separate from the mining/quarrying operation, so the exemption can apply to waste arising from winning the primary material from the spoil, but it does not apply to waste arising from the working of minerals from mines/quarries.

You do not need a certificate from us to qualify for this exemption but you must keep commercial documents showing the source of the waste.

4.3 Pet cemeteries

Pet cemeteries may be treated as landfill sites under environmental law. However, burials of dead pets at such sites are not taxable. To qualify for exemption the site must be used solely for the burial of dead domestic pets. In these circumstances the operator of the site is not required to register with us for Landfill Tax.

4.4 Filling of quarries

4.4.1 Conditions

Lower rated waste which is used for the purposes of filling existing or former quarries may qualify for exemption. The following table provides a summary of the conditions that must be met to qualify for exemption.

If ...


and …


then ...


  • the waste disposed of consists only of material listed in the Landfill Tax (Qualifying Material) Order 2011, a summary of which is set out in section 18, or
  • the waste disposed of consists mainly of material listed in the Landfill Tax (Qualifying Material) Order 2011 save for an incidental amount of standard rated waste as described in paragraph 3.3.
  • the disposal takes place at a quarry, and
  • there is planning consent in place to fill (or partially fill) the quarry, and
  • the waste management licence or permit only authorises the disposal of qualifying material,

the disposal of waste is exempt.


4.4.2 What is a quarry?

We depend on common usage of the term quarry. For example, the Quarries Regulations 1999 defines a quarry as:

'an excavation or system of excavations made for the purpose of, or in connection with, the extraction of minerals (whether in their natural state or in solution or suspension) or products of minerals, being neither a mine nor merely a well or borehole or a well and borehole combined'.

We therefore see the term quarry as also applying to sand, gravel and clay pits and to other surface mineral workings.

4.4.3 'Old quarries'

Where a quarry was in existence before 1 October 1999 and quarrying operations ceased before then and there is not a planning consent in place either on or before 1 October 1999 to fill the quarry, it will not qualify for the exemption.

4.4.4 Variation of licence or permit to comply with the exemption

Many quarries taking only lower rated material may still have waste management licences or permits that authorise the disposal of other wastes. You may treat such licences/permits as being ones which only authorise the disposal of lower rated material for the period between the making of an application for the amendment of the licence/permit to authorise the disposal only of 'qualifying material' and the final resolution of that application, subject to that period not exceeding two years.

An application for amendment of a licence or permit is resolved if it is:

  • granted
  • withdrawn, or
  • refused and a time limit for appeal against refusal expires without an appeal having been commenced.

Where an application to alter the waste management licence or permit has been made, disposals of material that were exempted from tax during the period between the making of the application and its resolution (or the two year period from the making of the application if that is the shorter period) remain exempt even if the application is unsuccessful. However, any disposals of material at the site after the end of that period will not qualify for exemption unless the application was granted.

Where an application is not resolved within two years but is ultimately granted, disposals made during the period between the end of the two years and the date on which the application is granted will not qualify for exemption.

4.5 Waste from visiting forces

Visiting NATO forces are exempt from paying Landfill Tax if relevant conditions are met.

To supply waste disposal services to visiting forces without charging Landfill Tax, a waste disposal contractor must have an official contract with the force authority showing:

  • how long the contract will last
  • the bases the contractor will cover, and
  • the type and the amount of waste to be removed.

The contractor must also obtain an exemption certificate from the base Civil Engineer's office who will issue a certificate each month indicating the tonnage of waste to be removed and placed in landfill. This amount is the Approved Monthly Tonnage (AMT). The certificate must state the base where the contractor will collect the waste and the landfill site where it is to be deposited. In the case of landfilled waste from US visiting forces, the exemption certificate must contain the following declaration:

'The Landfill Tax liable on the disposal of active waste under this contract by landfill is to be relieved under the arrangements agreed between the appropriate authorities of the US visiting forces and HMRC reference: RDM 428/601/01. I hereby certify that this is official US forces active waste'.

In the case of landfilled waste from other NATO visiting forces, the exemption certificate must contain a similar declaration referring to an agreement between the force concerned and us, and certifying that this is visiting forces' waste.

The contractor must pass the certificate to you and you should use it to claim a reduction on your Landfill Tax return. You must keep the original certificates for our inspection.

5 Calculating the weight of waste

5.1 Sites with a weighbridge

The basic method of calculating the weight of waste is by weighing it at the time of disposal. If there is a weighbridge at your landfill site, we would expect you to use it. Weighbridges used at landfill sites to calculate weight for the purposes of the Landfill Tax must comply with the relevant weights and measures legislation.

You can ask us to agree an alternative method of calculating the weight if:

  • using the weighbridge would involve a costly change to your current practices (for example, because the waste does not normally pass near the weighbridge), or
  • your weighbridge has broken down

5.2 Sites without a weighbridge

If there is no weighbridge at your site, you can use one or a mixture of three specified methods of calculating the weight of waste. A summary of the specified methods for such sites can be found at paragraph 5.3 and details of the methods can be found in paragraphs 5.4, 5.5 and 5.6.

If you cannot operate a specified method you can propose another method (a 'bespoke method'). You must be able to satisfy us that this will produce a fair and reasonable calculation of weight. Once satisfied, we will agree in writing and normally this agreement will run for 12 months. You must notify us of any changes to your business practices which will affect the reliability of this method. You must also notify us if you wish to change from a bespoke method to weighing the waste. On occasions we may wish to have an independent check (for example, by test weighing loads) on the accuracy of the method used. In addition, you must satisfy the weights and measures legislation.

5.3 Specified methods for sites without weighbridges

The conditions specified in paragraphs 5.4, 5.5 and 5.6 have the force of law under the Landfill Tax Regulations 1996 and remain in force until withdrawn by a further notice. If you wish to use any of the specified methods detailed in paragraphs 5.4, 5.5 and 5.6, you must abide by all the conditions specified under the relevant method.

You can use the specified methods without our agreement. You do not need to notify us that you have started to use a specified method unless you wish to:

  • change from a bespoke method prior to the expiry of the current agreement, or
  • agree a bespoke method as well.

However, once you have started to use a specified method you will not normally be allowed to change it except at the end of any complete year of operating it, reckoned from the beginning of the tax period in which you first start to use a specified method.

You can use a mixture of specified methods for different waste streams or for different customers but you must be consistent, that is, when you have started using a method for a particular waste stream or customer you must continue to do so.

5.4 Specified method one: maximum permitted weight of container

5.4.1 Description of method

This method involves recording the maximum weight that a lorry, skip, rail wagon, and so on is permitted to carry and applying the appropriate rate of tax.

5.4.2 Maximum weights

You can use either the maximum plated weight that the vehicle can carry or the weights specified in the three tables below.

You should use the gross plated weight of the vehicle/container less its tare weight.

Any vehicles that are partially filled must be treated as full for your tax calculation purposes.

Lorries without cranes or buckets

Vehicle type


Maximum weight


4 axle lorry


20 tonnes


3 axle lorry


15 tonnes


2 axle lorry


10 tonnes


Lorries with cranes or buckets

If a crane or bucket is fitted to a vehicle the maximum weight that can be carried is reduced by two tonnes.

Vehicle type


Maximum weight


4 axle lorry with grab


18 tonnes


3 axle lorry with grab


13 tonnes


2 axle lorry with grab


8 tonnes


Light goods vehicles/vans/cars

Vehicle type


Maximum weight


Light goods vehicles


The manufacturer's plate, usually in the passenger door well, shows the maximum gross weight.


Other cars and vans


The vehicle handbook shows the maximum gross vehicle weight of the vehicle. Deduct from this the unladen weight shown in the vehicle handbook to give you the weight that can be carried by the vehicle.


5.4.3 What records do I need to keep?

To operate this method you must record all waste brought onto your site(s), showing the identifying number and type of vehicle/container, a description of the waste carried, and the date the waste was disposed at your site. You must also establish an audit trail or register which records the gross weight, net tare weight and maximum carrying weight for each vehicle/container using your site(s) for waste disposal.

5.5 Specified method two - volume to weight conversion

5.5.1 Description of method

To operate this method you will need to know the cubic capacity of the vehicles (lorry, skip, rail wagon, barge, and so on) that deliver waste to your site. These should be used with the categories of waste and the conversion factors in paragraph 5.5.2.

To comply with weights and measures legislation the maximum cubic capacity of the container must be a multiple of 0.1 cubic metres. Measurement can only go to one decimal place.

If the calculation results in a tonnage which is greater than the legal carrying capacity of the vehicle, it is to your benefit to use the maximum permitted weight of the container method (see paragraph 5.4).

Your tax calculations must be based on all containers and vehicles being full.

5.5.2 Conversion factors

Note: If the waste falls into more than one category, the higher conversion factor applies to all of the waste.

Waste category


Typical waste types


Cubic metres to tonnes - multiply by


Cubic yards to tonnes - multiply by


Inactive or inert waste


Largely water insoluble and non or very slowly biodegradable, for example, sand, subsoil, concrete, bricks, mineral fibres, fibreglass and so on.


1.5


1.15


General industrial waste: non-special, not compacted.


(As compaction can significantly increase the density of this category of waste, if you accept compacted wastes you will need to uplift the conversion factor accordingly)


Paper and plastics.


Card, pallets, plasterboard, canteen waste, sawdust, textiles, leather.


Timber, building and construction wastes, factory waste and sweepings, and so on.


Foundry sands, slags, pulverised fuel ash, ashes from waste incineration.


0.15


0.4


0.6


1.5


0.11


0.3


0.46


1.15


Household waste - not compacted


Non-special, non-inert wastes from domestic premises, including collected household waste.


0.2


0.15


Household waste - compacted (includes all bulk disposals)


Non-special, non-inert wastes from domestic premises, including collected household waste.


0.4


0.30


Commercial waste - not compacted.


(As compaction can significantly increase the density of this category of waste, if you accept compacted wastes you will need to uplift the conversion factor accordingly)


Non-special, non-inert wastes from shops, hospitals, leisure centres, offices, and so on., including civic amenity waste, parks and gardens waste, street litter, supermarket, shop and restaurant waste, general office waste.


0.2


0.15


Special waste


Defined by environmental regulations - broadly equivalent to hazardous waste.


1.0


0.76


5.5.3 What records do I need to keep?

You must record all waste brought onto your site(s), showing the identifying number and type of vehicle/container, a description of the waste carried, and the date disposed at your site. The volume of the vehicle/container must be recorded and evidenced with whatever documentation is available from the haulier.

5.6 Specified method three - weighing the waste prior to receipt at the site

5.6.1 Description of method

You may accept waste that is weighed away from your landfill site. If there is a clear audit trail including a record of weights for each vehicle, container, wagon, and so on. And they go directly to the site, then this scheme can be used to calculate Landfill Tax.

5.6.2 What records do I need to keep?

To operate this method you must record all waste brought onto your site(s), showing where the waste was weighed, the identifying number and type of vehicle/container, a description of the waste, and the date disposed at your site. You must also record and retain the weighbridge tickets.

5.7 Discounting water

5.7.1 What are the qualifying conditions?

In certain circumstances, you can apply to discount the water content of waste (but only where it is not present naturally) when calculating the taxable weight of the waste. The circumstances under which you can and cannot apply to discount the water content of the waste are set out below.

If the water has ...


and …


then ...


  • been added to allow transportation for disposal, or
  • been used for the extraction of minerals or
  • arisen or been added or both, in the course of an industrial process.

The water constitutes 25% or more of the waste, by weight,


you can apply to discount the water content of the waste.


You will not be able to discount water where:

  • it is present naturally in the waste (although you may agree a scheme to discount water up to, but not beyond, the amount present naturally)
  • it is present because of rain or snow
  • it was added to waste to damp it down to prevent it blowing away and the added water is less than 25% of the waste, by weight, or
  • any of the water is capable of escaping from the landfill site by leaching. (This restriction does not apply if the only water that can escape is pure water or if the leachate is collected on site and treated in order to eliminate any potential it has to cause harm.)

For effluent or sewage sludge from waste water treatment works/sewage disposal works, you can apply to discount the water content, but:

  • water which is present naturally cannot be discounted, and
  • any water which has been extracted prior to disposal is treated as added water in preference to water present naturally in the material.

5.7.2 How do I apply to discount water?

Waste producers may propose schemes to quantify the water content of their waste, based, for example, on their production records. They will need to complete an application form LT 1WD Application for discounting of water content of waste which they can get from our website or by phoning the Excise Helpline, on 0845 010 9000.

If we are satisfied that the application qualifies for a scheme for discounting water, we will send written approval to you and the waste producer.

However, we will not approve such schemes unless the waste producers have your prior agreement, which you gave using form LT4WD.

6 Tax points

6.1 What is the tax point?

The tax point is the time when the tax becomes due. You must account for tax in the accounting period in which the tax point occurs. There are two types of tax point that you can choose to use - the disposal tax point or the invoice date tax point:

  • the disposal tax point is the date the waste is disposed of to landfill. If this tax point suits your present accounting system you should use this date to identify the amount of tax due in the relevant accounting period
  • the invoice date tax point is the date the invoice is issued. If you issue a landfill invoice (see paragraph 6.2) within 14 days of the taxable disposal, the date of issue will create a tax point unless you tell us in writing that you want the date of disposal to be the tax point. We may allow an extension to this 14 day period if that assists your current accounting system (for example, you may already have an arrangement whereby you invoice for VAT monthly). To ask for such an extension you will need to write to us at:
    HM Revenue & Customs
    Environmental Taxes Information Centre
    BP4002, Chillingham House
    Benton Park View
    Newcastle upon Tyne
    NE98 1ZZ

You do not create a tax point for Landfill Tax if you issue a landfill invoice before the date of disposal. Likewise, the date of payment does not create a tax point.

You can use different types of tax point for different customers or types of waste.

6.2 What information must be on Landfill Tax invoices?

If you wish to use the invoice date tax point you must issue landfill invoices. For an invoice to qualify as a landfill invoice it must include all of the following information:

  • an identifying number
  • date of issue
  • date(s) of disposal(s) it refers to
  • your name, address and Landfill Tax registration number
  • the name and address of your customer
  • the weight and description of waste disposed
  • the rate(s) of tax applied to each disposal, and
  • the total amount payable on the invoice.

You do not have to show the amount of Landfill Tax payable on the disposal. If you do, you must also include a statement that the amount is not recoverable as input VAT. You may issue a combined VAT and Landfill Tax invoice. You must apply VAT to the full invoiced amount including Landfill Tax. There is an example of a landfill invoice in section 19.

You need to keep copies of invoices and other accounting documents that you issue. If you issue an invoice to a customer for a disposal of waste and you show Landfill Tax on it, irrespective of whether it is a landfill invoice, you will need to account to us for that amount charged. If the tax charged is more than the amount of tax due when the waste is disposed of to landfill (for example, because you recycle some of it) you still have to pay us the full amount of tax shown on the invoice.

7 Information areas

7.1 What is an information area?

We need to be able to distinguish between those activities on a landfill site which constitute a taxable disposal and those which are non-taxable uses of waste. To help us to do this, we may require that non-taxable uses of waste take place in a designated area of your site, known as an information area.

In order to have as much clarity as possible on tax liability, you may find it helpful to tell us about non-taxable uses of waste by contacting us at the address given in paragraph 6.1 and discuss with us the possibility of setting up an information area.

We recommend that you contact your environmental regulator (see paragraph 4.1) to ensure that any changes you propose to make to your site, or the running of it as a result of the introduction of an information area, are acceptable under the terms of your waste management licence or permit. You may also require planning permission.

7.2 Designating an area as an information area

We can require you to designate more than one information area (to allow storage of different types of waste or different activities such as sorting and recycling). We can also require you to use an information area for one particular use or for a number of uses. In these situations we will require you to identify clearly the quantities and type of material which relate to the different uses.

In requiring you to designate an information area we will:

  • identify the landfill site concerned
  • specify the date on which the information area comes into operation
  • specify the uses to which material temporarily deposited in the area(s) is to be put
  • specify the types of material to be deposited in the area(s), and
  • set the boundaries of the area(s)

You will be able to discuss our requirements with us and we will amend them if appropriate. We welcome discussion either at, or prior to, the point we require the setting up of an information area or at any point during the operation of the information area.

7.3 Boundaries

We will not require you to fence the area, but it must be clearly identifiable within your site. For example, boundary markers, site roads, buildings or landscape features may help you to identify the area. More than one information area may be required on a site.

You may also wish to change the area's boundaries periodically as your landfilling operations progress. Providing the non-taxable material is clearly identifiable we would not normally object to this, but you will require our prior written approval.

7.4 Weighing waste

To operate an information area you will need to weigh waste entering and being removed from the area. If you have a weighbridge you must use it. If you do not, you may use a specified method or propose an alternative method for our approval. See section 5 for further information on calculating the weight of waste.

7.5 Information area account

If you operate an information area you will need to keep an information area account. The account must clearly identify the quantities and type of material which relate to different uses that you carry out. The account must include the following details for each time material is deposited in, or removed from, the area:

Material deposited in the area:


Material removed from the area:


date deposited


date removed


weight and description


weight and description


intended destination or use


actual destination it went to or use it was put to


Where you store bulk waste in the information area and you cannot get at or identify the earliest stored waste we will treat removals from the area as movements of that earliest stored waste.

7.6 Breach of conditions

If you do not designate an information area when required to do so, or fail to meet the requirements associated with such an area, particularly the maintenance of records and provision of this information if requested, the uses of waste in question will be treated as a taxable disposal and tax will be due.

8 Bad debt relief

8.1 When am I entitled to bad debt relief?

If a customer of yours becomes insolvent or is otherwise unable to pay your charges for landfilling taxable waste, you may claim bad debt relief if you meet all of the following conditions:

  • you have carried out a taxable activity, for example disposal of waste, for a consideration in money
  • the customer is not connected with you (see paragraph 11.3.2 for details of 'connected persons')
  • you have already accounted for the Landfill Tax on the disposal and paid it to us
  • you have written off the debt in your day-to-day accounts and transferred it to a separate bad debt account
  • you issued a landfill invoice which shows the amount of Landfill Tax in respect of the disposal (see paragraph 6.2 and section 19 for the details that must be on a landfill invoice)
  • that landfill invoice was issued within 14 days of the disposal, or within such other period we agreed with you (see paragraph 6.1 about extending the invoice date tax point), and
  • 12 months have passed since the date of issue of the landfill invoice.

8.2 What records are required to claim bad debt relief?

Before you can claim relief you must have the following records:

  • a copy of the Landfill Tax invoice that you issued, and
  • a separate bad debt account showing, for each relevant disposal
    - the amount of tax charged
    - the return in which that tax was accounted for and when it was paid
    - the date and identifying number of the landfill invoice that was issued
    - any payment or other consideration received, whether before or after you make the claim
    - the details of any waste transfer note
    - the outstanding amount
    - the amount of the claim, and
    - the return in which the claim was made.

8.3 How much can I claim?

You can normally claim credit for the amount of Landfill Tax you charged on the disposal relating to the bad debt. However, you must offset against the amount of the bad debt:

  • any amount that you owe the customer (a mutual debt)
  • the value of any enforceable security that you have in relation to that customer, and/or
  • any part payment made by the customer for the debt.

In such a case, your claim to credit can only be for the same proportion of Landfill Tax that the outstanding bad debt forms of the whole consideration for the disposal. For example:

  • total charge for disposal £156 (including £56 Landfill Tax which you have paid to us)
  • payment received £60
  • amount of debt £96
  • bad debt relief claimable £96/£156 × £56 = £34.46.

If you have more than one debt with your customer (including debts relating to non-taxable or non-waste transactions) and your customer makes a payment to you, this payment should be allocated firstly to the oldest debt, then to the next oldest debt if there is a remainder, and so on.

8.4 How do I claim bad debt relief?

To claim credit for bad debt relief you must:

  • have the required information detailed in paragraphs 8.1 and 8.2, and
  • include the amount of the Landfill Tax you are claiming in box 6 of your Landfill Tax return, once you have written off the debt. The relevant return is the one which includes the first anniversary of the date of issue of the landfill invoice.

8.5 What if I subsequently receive a payment from my customer?

If you have claimed credit for bad debt relief and you subsequently receive any payment from your customer, you will have to repay some or all of the credit. The amount that you have to repay is calculated as the credit claimed, multiplied by the amount received or attributed, divided by the outstanding consideration for the disposal.

Using the example in paragraph 8.3:

  • amount of credit claimed £18
  • payment received £80
  • amount of debt outstanding - £90
  • amount repayable £18 × £80/£90 = £16.

9 Credit for waste removed to another landfill site

9.1 When can I claim a credit of Landfill Tax?

If you accept waste at your site and then have to remove it to another landfill site you can claim a credit of the tax you accounted for and paid on the original disposal at your site, if you meet all of the following conditions:

  • you have removed waste from your site because the environmental regulator ruled that the waste breached the terms of the licence or permit for the site and has directed that it be removed
  • the waste is disposed of at another landfill site, and
  • you have paid the other site operator Landfill Tax on the disposal or, if you are the operator of the other site, you account for tax on the disposal.

9.2 What records are required to claim the credit?

As evidence for your claim, you should keep the following records:

  • a copy of the correspondence from the environmental regulator in which you are directed to remove the waste because its presence breaches the conditions of your site licence or permit, and
  • a removal account for wastes permanently removed showing, for each removal, and cross-referenced to the original disposal and the original tax paid
    - the weight and type of waste removed
    - to whom it was transferred, and
    • the date of removal

9.3 How much can I claim?

In calculating the amount of credit, the tax rate to be applied to the material removed is the one that applied at the time of the original disposal (see section 3).

9.4 How do I make a claim?

To claim the credit you should:

  • have the required information detailed in paragraphs 9.1 and 9.2, and
  • include the amount of Landfill Tax you are claiming in box 7 of your Landfill Tax return for the accounting period in which the waste was disposed of at another landfill site.

10 Credit for landfilled waste later removed for recycling, incineration or re-use

10.1 When can I claim a credit of Landfill Tax?

If you landfill waste temporarily with the intention of later recycling, incinerating or removing it for re-use (but not on a landfill site, except when re-using it as restoration material - see below in this paragraph), when you remove the waste you will be able to claim a credit of the tax you accounted for and paid on the original disposal at your site, if you meet both of the following conditions:

  • you had written to us at the address given in paragraph 6.1 before you landfilled the waste, telling us that the disposal would be temporary, and
  • you remove the waste within a specified period from the date of disposal. This is normally up to 12 months, but where water has been added to facilitate the disposal of the waste this period can be extended to five years (to allow the waste to dry out).

Prior to 1 September 2009 the credit provisions did not allow the claiming of credit for material re-used on a landfill site. From 1 September 2009, material that is taxable because it has been used to create or maintain:

  • a temporary haul road
  • temporary hard standing, or
  • a temporary screening bund.

(activities 2, 3 and 5 in paragraph 2.5), and is then removed for use in the restoration of a landfill site is eligible for credit, if you have met both of the conditions above.

10.2 What records are required to claim the credit?

As evidence for your claim, you should keep a removal account for wastes permanently removed showing, for each removal, and cross-referenced to the original disposal and the original tax paid:

  • the weight and type of waste removed
  • to whom the waste was transferred
  • the qualifying use the waste is to be put to, and
  • the date the waste was recycled, incinerated or re-used.

10.3 How much can I claim?

In calculating the amount of credit, the tax rate to be applied to the material removed is the one that applied at the time of the original disposal (see section 3).

10.4 How do I make a claim?

To claim the credit you should:

  • have the required information detailed in paragraphs 10.1 and 10.2, and
  • include the amount of Landfill Tax you are claiming in box 7 of your Landfill Tax return for the accounting period in which the waste was recycled, incinerated or re-used.

11 Landfill Communities Fund (LCF)

11.1 Introduction to the scheme

11.1.1 What is the scheme?

The Landfill Communities Fund scheme encourages landfill site operators to fund local community environmental projects. Under the scheme you can claim a tax credit for contributions you make to approved environmental bodies (EBs). These bodies are those enrolled by ENTRUST, the regulatory body specifically set up to oversee the scheme.

You can claim a tax credit worth 90% of any qualifying contribution that you make to an enrolled EB for spending on an approved object, subject to a maximum percentage of your Landfill Tax liability during your contribution year.

11.1.2 Maximum percentage credit

The maximum percentage credit may be liable to change each year. The changes to the maximum percentage credit are shown in the following table:

Date (inclusive)


Maximum percentage credit


01.10.96 – 31.03.03


20%


01.04.03 - 31.03.04


6.5%


01.04.04 – 31.03.05


6.8%


01.04.05 – 31.03.06


6.0%


01.04.06 – 31.03.07


6.7%


01.04.07 – 31.03.08


6.6%


01.04.08 - 31.03.10


6.0%


01.04.10 - 31.03.11


5.5%


01.04.11 - 31.03.12


6.2%


01.04.12 - 31.03.13


5.6%


01.04.13 - 31.03.14


6.8%


You will be able to access details of any changes to this percentage on our website. Go to hmrc.gov.uk or phone the Excise Helpline, on 0845 010 9000.

If 1 April falls within your accounting period there are rules for apportioning the amount of credit claimed to account for these changes (see paragraph 11.7.3 for methods of apportionment).

11.1.3 Contacting ENTRUST

ENTRUST publishes literature which you will need to read if you wish to participate in the scheme. This includes guidance on the obligations of EBs and conditions imposed upon them.

To get the ENTRUST literature and information contact:

ENTRUST
60 Holly Walk
Royal Leamington Spa
CV32 4JE

Phone: 01926 488 300
Fax: 01926 488 388
Website address: entrust.org.uk

11.2 What is a qualifying contribution?

A contribution is a qualifying contribution if the following conditions are met:

Number


Condition


Further information


1.


A registered landfill site operator must make it to an enrolled EB.


 

2.


You ensure that any contributions are made subject to a written condition that the enrolled EB only spends the payment (or any income derived from it) on approved objects.


We would expect such conditions to create a contractual obligation between the enrolled body and yourself.


We would also expect you to take action to recover your contribution(s) if you became aware that an EB had failed to honour the contractual obligation that contributions are spent only on approved objects.


You must repay to us 90% of qualifying contributions which you recover by such action.


3.


A contribution is not repaid to you or to a third party contributor in the same Landfill Tax accounting period in which you paid it


  • see paragraph 11.8.1 for information on donations from third parties, and
  • see paragraph 11.8.2 for information on the repayment of tax credits on contributions repaid other than in the same tax period that they were made.

4.


You record the:


  • amount and date of each payment, and
  • name and enrolment number of the EB receiving it.
 

5.


You record the:


  • name and address of any third party contributor
  • amount that person gives you, or is expected to give you, and
  • actual or expected date of receipt of these amounts.
 

6.


If you receive third party contributions, you provide to ENTRUST:


  • all the details listed in 5 above, and
  • the enrolment number of the EB receiving the qualifying contribution.
 

7.


You inform the EB of the name and address of any third party contributing to the qualifying contribution concerned.


 

11.3 Enrolled environmental bodies

11.3.1 What are the conditions for enrolment?

An EB that wants to enrol with ENTRUST must be non-profit making, but does not have to be a charity. It can be a body corporate, a trust, a partnership or other unincorporated body, but must not be controlled by one or more of the following:

  • local authorities
  • bodies corporate controlled by one or more authority
  • registered landfill site operators, or
  • a person connected with any of the above (see paragraph 11.3.2).

As well as not controlling an EB, the following must not be involved in its management. A person:

  • who controlled or managed an EB that had its enrolment revoked for reasons other than because it asked to surrender its enrolment
  • convicted of an indictable offence
  • disqualified from being a charity trustee
  • connected with any of the above (see paragraph 11.3.2), or
  • to whom a mental health order has effect.

The work of a body must not benefit an operator who contributed to it and claimed Landfill Tax credits or a third party contributor (except where they benefit as a class of persons). The body is also prevented from carrying out any work required to be done by the site operator under any enforcement notice, planning permission, approval or consent, or other statutory consent or approval. The precise requirements for enrolment as an EB under the Landfill Tax Regulations 1996 can be complicated and it is difficult to give generalised guidance. ENTRUST has literature that explain the details of enrolment further (see paragraph 11.1.3 for contact details).

11.3.2 What is a connected person?

Section 1122 of the Corporation Tax Act 2010 determines whether persons are connected. While it is not possible to cover every aspect of the Taxes Act definitions in this guidance, a connected person includes relatives, spouses, partnerships and associated companies. An employee is not connected to an employer purely on the basis of employment (although the employee might be connected as a director or major shareholder who controls the employing company).

11.3.3 How do I know if a body is enrolled?

If you wish to claim tax credits, you are responsible for ensuring that a body is enrolled before you make a qualifying contribution to it. There are a number of checks you can carry out to ensure that a body is enrolled:

  • Check the enrolment number with ENTRUST. You need this number to claim tax credit
  • ENTRUST publish a list of enrolled environmental bodies and press releases listing any revoked enrolments on their website (see paragraph 11.1.3). Check this to confirm the enrolment of an EB and also those bodies which no longer qualify for contributions under the scheme
  • Check details of revoked enrolments which we publish on a regular basis and send to all operators.

11.4 Approved objects for the scheme

The scheme's approved objects are:

  • reclamation of, or reduction in pollutants on, land (but no benefit must accrue to any person who carried out or knowingly permitted the previous use)
  • the provision, maintenance or improvement of a public park or other public amenity in the vicinity of a landfill site (the park or amenity must not be operated with a view to profit)
  • the maintenance, repair or restoration of a building or other structure of religious or architectural interest in the vicinity of a landfill site (such places must be open to the public and must not be operated with a view to profit)
  • the conservation or promotion of biological diversity through the provision, conservation, restoration or enhancement of a natural habitat, or the maintenance or recovery of a species in its natural habitat, on land or in water situated in the vicinity of a landfill site (the work must not be required by a notice or order), and
  • the provision of financial, administration and other similar services to enrolled environmental bodies.

ENTRUST literature describes the approved objects that qualify for funding under the scheme in more detail. In the first instance you should seek assurance from the EB that it will spend your contribution on approved objects. If you have doubts, contact ENTRUST for advice as to whether a particular project is within an approved object (see paragraph 11.1.3 for contact details).

11.5 Calculating your Landfill Tax liability?

Your Landfill Tax liability is the amount of Landfill Tax due after taking account of any credits, over-declarations or under-declarations, but you should not deduct credits due as a result of contributions to environmental bodies when calculating your liability.

11.6 Contribution years

Your first contribution year starts from your effective registration date and ends on the 31 March following. Thereafter your contribution year will run from 1 April to 31 March every year. If 1 April falls in the middle of your accounting period, you must apportion the amount of credit claimed (see paragraph 11.7.3 for methods of apportionment).

11.7 Claiming tax credits

11.7.1 When to claim

You should claim the amount of credit due on the Landfill Tax return covering the period in which the payment to the EB occurs. However, to give you time to calculate a period's tax liability and to then make a qualifying contribution, you can also claim for contributions made after the end of the period but before the return for that period is due to be received by us.

11.7.2 Amount to claim

You can not anticipate your Landfill Tax payments. Therefore the amount of credit that you can claim on your first return in the contribution year is the maximum percentage credit of that period's tax liability. In the second period the amount of credit is the maximum percentage credit of the first and second periods' tax liability, less your claim for credit from the first period and so on.

11.7.3 Apportionment

If 1 April falls in the middle of your accounting period, you must apportion the amount of credit claimed for any qualifying contributions made, or treated as made before and after 1 April between your contribution years. You can use either of the following methods as the basis of your apportionment:

  • the number of days of your accounting period before 1 April and the number of days that fall on or after 1 April, or
  • the amount of tax charged on taxable disposals made in the accounting period before 1 April and the amount of tax charged on taxable disposals made in the accounting period on or after 1 April.

11.8 Circumstances affecting entitlement to credit

11.8.1 Donations from other organisations (third parties)

A condition of a payment qualifying for Landfill Tax credit is that a registered landfill site operator must make it. Therefore a payment by a third party to an enrolled EB would not create an entitlement to a credit to Landfill Tax.

However, there is nothing to prevent a third party from helping to fund your contribution, so long as that person or organisation is not itself the enrolled EB you propose to donate to. You must make sure that any third party contributors do not directly benefit from the projects which they are helping to fund. You must also record and notify ENTRUST and the EB receiving the contribution of the third party contribution (ENTRUST'S details shown in paragraph 11.1.3).

11.8.2 Environmental body repays contributions

If...


then you must…


the EB you funded repays all or part of your qualifying contribution to a third party contributor and/or yourself (for example, because the project costs less than forecast)


repay 90% of refunded qualifying contributions to us. You should send payment to the address in paragraph 12.8. You must enclose a covering letter with your payment including your name, address and Landfill Tax registration number and an explanation for the payment.


11.8.3 Environmental body transfers contribution to another enrolled body

If ...


then ...


an EB transfers your contribution to another enrolled body (for example, because the original EB ceases to operate)


  • the transferred payment must be subject to a condition that it is spent on an approved object
  • you are still treated as the contributor (although, obviously, you cannot claim a further tax credit on the transfer of funds)
  • the EB must notify ENTRUST of the transfer and ENTRUST, in turn, will inform you of any notification received, and
  • it is in your best interest to make sure that bodies you donate to inform you if such transfers occur, as how your contribution is spent determines your entitlement to tax credit.

11.8.4 Environmental body does not spend contribution on an approved object

We can recover all or part of a tax credit where we are not satisfied that the relevant contribution was spent on approved objects. ENTRUST inform us of all irregularities and we consider each case on its merits when deciding whether the repayment of credit ('claw back') is appropriate.

Important: Although the scheme provides for a tax credit of 90% of your contribution, the whole amount of the contribution itself is your money. It is in your own interest that you take reasonable precautions to make sure that your contributions are spent on approved objects. The precautions you have taken to make sure that money is spent on approved objects will be an important factor in our decision on repayment of tax credits.

Examples of reasonable precautions might include ...


Further information


Satisfying yourself that the project you propose to fund is covered by an approved object.


To qualify for credit you must have made your contribution subject to a condition that it is only spent on approved objects (see paragraph 11.4).


Ensuring that your interests are represented (or at least that you have an observer) on the board of any environmental bodies to which you make significant contributions.


Representation on a board may be precluded for certain charities and incorporated companies.


Seeking frequent updates on progress of projects you are sponsoring and only making further contributions if satisfactory progress is being made.


 

Staging your payments so that your contributions match the profiled expenditure of the EB.


This would reduce the risk of mis-spending of significant 'up-front' donations.


Spreading your contributions among a number of bodies to reduce the risk.


 

Setting up a joint signatory bank account for contributions which requires your signature before funds can be withdrawn.


 

Satisfying yourself of the EB you propose to fund


See paragraph 11.8.6.


11.8.5 Environmental body ceases to be enrolled

There are a number of reasons why an EB might have its enrolment in the scheme revoked. For example, the body might:

  • voluntarily wish to leave the scheme (possibly because it is not attracting funding)
  • cease operating (possibly because it was only set up to deliver a specific project), or
  • fail to comply with the scheme rules.

You lose your entitlement to credit on any of your contributions which remain unspent at the time that the EB you donated to had its enrolment revoked. You therefore need to make sure that part of your agreement with an EB includes the provision that unspent funds are returned to you if the body's enrolment is revoked.

11.8.6 Environmental bodies accounting practices

ENTRUST publishes best practice guidance to EBs that they should maintain a clear audit trail to show a link between expenditure and contributing landfill site operators. Where an EB is unable to maintain such records, ENTRUST advises the EB to inform the contributing landfill site operator.

You may therefore wish to consider the accounting practices of an EB you fund/propose to fund to make sure that it satisfies your requirements to safeguard your contribution. Where we are not satisfied that a contribution has been spent on approved objects, we can seek to recover all or part of the tax credit from you. Evidence provided by ENTRUST from the EB’s records will be considered as part of our decision.

11.9 Summary of a landfill site operator's responsibilities under the scheme

We have set out your main responsibilities in the previous paragraphs. However, a checklist of some of your responsibilities when using the scheme is detailed below.

Action


1


Make sure the EB you wish to fund is enrolled within the scheme.


2


Make sure the project you wish to fund is covered by an approved object.


3


Make contributions subject to a condition that they are only spent on approved objects.


4


Record the details of the contributions and body receiving them.


5


Record details of any third party contribution received and notify ENTRUST and the EB of them.


6


Make sure the EB is not controlled by local authorities or landfill site operators.


7


Make sure the EB is not controlled or managed by the persons listed in paragraphs 11.3.1 and 11.3.2.


8


Make sure that you, or a third party contributor, do not benefit from your contributions.


9


Only claim credit up to the maximum liability percentage of your annual Landfill Tax liability (see paragraph 11.1.2).


10


Make sure you have used the correct dates to calculate your contribution year (see paragraph 11.6).


11


Check whether the EB has transferred your contribution to another enrolled body. If they have, make sure that it informs you of the transfer. You are still treated as the contributor.


12


Take reasonable precautions to make sure that your money is spent on approved objects (see paragraph 11.8.4).


13


Check whether the EB's enrolment has been revoked. If it has, recover any of your money that is unspent at that date.


14


Repay 90% of any repayment of contributions you receive to us (see paragraph 11.8.2).


11.10 Revocation of environmental bodies

EBs must comply with the requirements set out in regulation 33A(1) of the Landfill Tax Regulations 1996. Where ENTRUST identifies potential breaches of these requirements it investigates and, where appropriate, applies sanctions. ENTRUST may report a potential breach to us and, if we think that it is appropriate, we may revoke the approval of the EB concerned. We make our decision based on the evidence of non-compliance provided by ENTRUST, which includes representations made by the EB in response to the alleged breach.

If an EB disagrees with our decision to revoke its approval, it can request a review of, or appeal, the decision. Further information on the review and appeal system can be found in section 17.

We will notify the EB of our decision in writing and notify ENTRUST so that, where appropriate, the EB can be removed from the list of enrolled EBs. The decision is also publicised to landfill site operators and other EBs.

You should see paragraph 11.8 for information on circumstances affecting entitlement to credit. If you make a contribution to an EB which later has its revoked, we may recover all or part of the tax credit you claim.

12 Registration

12.1 Who has to be registered for Landfill Tax?

If you are a landfill site operator (see paragraphs 2.4 and 2.6.1) and you are or have the intention of making taxable disposals (see paragraphs 2.1 and 12.2) you are liable to be registered. You must notify us of your liability to register within 30 days of making taxable disposals, or forming the intention to make taxable disposals. If you fail to notify us on time you may be liable to a penalty for failure to notify (see paragraph 16.1).

This applies even if you, as licence or permit holder, allow the site to be operated by someone else. We cannot register a site operator who is not the licence or permit holder. Unlike VAT, there is no registration threshold for Landfill Tax.

The registered person can be a:

Registered Person


Liability


Sole proprietor


 

Partnership


Each partner is liable for all the obligations and liabilities of the partnership in relation to Landfill Tax, including telling us about any liability to be registered.


Limited company


In certain circumstances:


  • associated companies can apply for group treatment - this will enable a group of companies to account for Landfill Tax under a single registration, or
  • a company can apply for divisional registration - this will enable its divisions to account for tax under separate registrations.

12.2 Registration process

Stage


Who


Action


1


You


Complete forms LT1 Landfill Tax - Application for Registration and LT1A Landfill Tax - application for registration landfill site details. You may have to complete other forms depending on your status. See paragraph 12.7 for details of the different registration forms.


2


Us


Process your application and send you a Registration Certificate which will tell you:


  • your Landfill Tax registration number, and
  • when your Landfill Tax returns are due.

3


You – when you receive your Registration Certificate


Check that all the details are correct. If there are any errors, please let us know and we will send you an amended certificate.


Note: If you do not receive a reply within three weeks of sending in your registration form, you should contact our Central Collection Unit (see paragraph 12.8 for details).


12.3 What if I operate more than one landfill site?

If you are the licence or permit holder for more than one landfill site you must account for tax under a single registration.

12.4 Transfer of a business as a going concern

If you acquire a Landfill Tax registered business as a going concern, and are not already registered for the tax, you must within 30 days, notify your liability to be registered. You will need to complete form LT68 Landfill Tax-request for transfer of a registration number (see paragraph 12.7 for details of forms).

In certain circumstances you may request the transfer of the existing tax registration number. It will not be possible to do so if:

  • the person selling or transferring the business continues to trade as a VAT or Landfill Tax registered business, or
  • you are already VAT registered.

We will notify you if the transfer of the number has been allowed - if so, you will become responsible for all existing liabilities of, and entitled to any credits due to, the previous owner.

12.5 Conditions of group treatment

Companies are eligible to be treated as members of a group if:

  • one of them controls each of the others, or
  • an individual, a company or a partnership controls all of them.

One body controls another if it is empowered by statute to control that body's activities, or if it is that body's holding company within the meaning of section 1159 of the Companies Act 2006. An individual may be regarded as a controlling body if the individual holds control over the other bodies in the same way as a holding company.

If you wish to apply for group treatment, you must nominate one of the members of the group to act as the 'representative member'. The representative member must have an established place of business in the UK and must complete forms LT1 Landfill Tax - Application for Registration, LT1A Landfill Tax - application for registration landfill site details and LT50 Landfill Tax - Application for Group Treatment. All group members must complete and sign form LT51 Landfill Tax - Group Member Details.

If you are allowed group treatment, any taxable business carried on by a member of the group will be treated as carried on by the representative member. All members of the group will be jointly and severally liable for any tax due from the representative member.

Unlike VAT group treatment you must account for and pay Landfill Tax on all taxable disposals made between members of the Landfill Tax group.

12.6 Can a company be registered in divisions?

Yes - a company which carries on its business through a number of divisions may apply for the separate registration of those divisions. Each division is given a separate Landfill Tax registration number and makes its own tax return. The company, however, remains legally responsible for the tax. The divisions must be independent units, having their own accounts and operating in different locations. An application will only be approved if we are satisfied it would cause real difficulty for the company to send in a single Landfill Tax return. All divisions must make Landfill Tax returns for the same periods. Application for a divisional registration should be made by completing a separate form LT1 Landfill Tax - Application for Registration for each division. These should be sent to us together with an accompanying letter.

12.7 Registration forms

The different registration forms are listed in the following table. You can get copies from our website hmrc.gov.uk or by phoning the Excise Helpline on 0845 010 9000.

Form No:


Title


Enables you to ...


LT1


Application for Registration


tell us that you are liable to be registered for the tax by providing details of your business, how you intend to pay the tax and so on.


LT1A


Application for Registration - Landfill Site Details


provide details of all the sites you operate (addresses, tonnages and type of waste landfilled and so on)


LT1B


Notification of Changes to Site Details


tell us of any changes to details of your sites which you had previously notified on LT1A (additional sites, closure of sites and so on)


LT2


Partnership Details


provide details (names, addresses and so on) of all partners


LT50


Application for Group Treatment


apply to set up a new Landfill Tax group or appoint a new representative member for an existing Landfill Tax group, and record site details of the representative member


LT51


Group Member Details


provide details of all members of a Landfill Tax group, including amending details of an existing group, and record site details of group members


LT68


Request for Transfer of a Registration Number


request the transfer of an existing registration number, including where the legal status of your business changes


12.8 How do I notify changes?

While you are registered for Landfill Tax you should notify the Central Collection Unit, at the following address, within 30 days of any changes in your business which may affect your registration.

HM Revenue & Customs
Central Collection Unit (Landfill Tax)
Alexander House
21 Victoria Avenue
Southend
SS99 1AY

Phone: 01702 366558
Fax: 01702 366562

This will help us to keep our records up to date and deal with your Landfill Tax affairs more efficiently.

12.9 How do I deregister?

You must tell the Central Collection Unit (see paragraph 12.8) in writing within 30 days if, at any time, you cease to have the intention to make taxable disposals so we can deregister you.

12.10 How do I claim a credit of Landfill Tax after I have de-registered?

If, after you have deregistered, you wish to claim credit either for:

  • bad debt relief
  • waste removed to another landfill site
  • landfilled waste later removed for recycling, incineration or re-use, or
  • waste previously subject to a prescribed landfill site activity and subsequently re-used to restore a landfill site.

You should write to us providing evidence of your entitlement to credit. Further details of entitlement to credit can be found in sections 8, 9 and 10.

12.11 Publication of the Landfill Tax register

We maintain a Landfill Tax register containing the information required to help us manage the tax. We regularly publish the names, business addresses and Landfill Tax registration numbers of those registered for Landfill Tax. Apart from the registration numbers, such details are already in the public domain as a result of environmental law. We will not publish any financial or confidential information you supply to us.

You can get a copy of the Landfill Tax register from our website, go to hmrc.gov.uk or by phoning the Excise Helpline on 0845 010 9000.

13 Accounting for tax

13.1 How do I account for the tax to you?

Persons registrable for Landfill Tax are required to submit a return to us on form LT100 Landfill Tax Return in respect of each accounting period and make payment of the tax liability established by that return. We will send you the returns a week or two before the end of each accounting period.

A return will normally cover a three month period and, if you are VAT registered; this period may or may not be the same as your VAT return period. You may apply to vary your return periods either at the time of sending your application to register or subsequently. You should write to us with your request. If you are applying for Landfill Tax registration, you should send your request with your application to register. If we feel that a risk to the revenue exists we may need you to send monthly returns.

13.2 What does the return look like?

A copy of the return and completion notes (forms LT100 Landfill Tax Return and LT100 Notes) are contained in section 20. Each return will show the date by which it must be filed and payment made (the due date). Unless you are on non-standard accounting periods, the due date is the last working day (excluding any weekends or public holidays) of the month following the end of the return period. The due date will not be affected by the payment method you choose.

13.3 What is the value for VAT?

This is the total invoice value including any amounts charged to customers to cover the cost of Landfill Tax.

13.4 How do I pay?

Payment should be made by one of the following methods:

  • Bankers Automated Clearing System (Bacs) direct debit
  • credit transfer by Clearing House Automated Payment System (CHAPS)
  • credit transfer by Bank Giro, or
  • cheque. Make your cheque payable to 'HMRC only' followed by your Landfill Tax reference number. You should put a line through any spaces on the 'pay' line. The payment should relate solely to your Landfill Tax liability and should be included with your return form.

If you wish to pay by credit transfer or direct debit you should contact the Central Collection Unit at the address in paragraph 12.8.

13.5 Paying in euro

You can pay us in euro, including arrears of tax. However, your returns and declarations must be made in sterling and all our repayments will be made in sterling.

13.6 Further information about how to pay Landfill Tax

There are more details about how to pay Landfill Tax on our website.

14 Records

14.1 What records must I keep?

You must be able to demonstrate, from the records you keep, that the amount declared on your Landfill Tax return is your correct tax liability. As well as waste received at your site you need to keep records of non-waste materials brought in for site engineering.

You will need to keep the following records:

Record


Description


Landfill tax account


This is your quarterly summary of total Landfill Tax due, detailing any credits of tax and any adjustments.


Information area account


See paragraph 7.5 for details of the records you must keep if you operate an information area.


Record of credits


See paragraph 9.2 for details of records that must be kept if you claim a credit of tax on waste removed on instructions from the environmental regulator because its presence breaches your licence or permit.


See paragraph 10.2 for details of records that must be kept for re-use, recycling or incineration.


Bad debt relief account


If you claim bad debt relief you must maintain a separate bad debt account (see paragraph 8.2 for details of what a bad debt account must show).


Contributions to environmental bodies


If you make contributions to an approved EB and claim tax credit you must maintain the records detailed in paragraph 11.2.


Invoices


You need to keep copies of all invoices and other accounting documents that you issue or receive.


Sites not using weighbridges


See paragraphs 5.4.3, 5.5.3 and 5.6.2 for details of records that must be kept if you operate a specified method for calculating the weight of the waste. If you have agreed a bespoke method with us, the records that must be kept will be detailed in your letter of approval.


Other records:


  • business and accounting records
  • waste transfer notes and other records of materials brought onto or removed from the landfill site
  • all credit or debit notes, and similar documents, issued or received by you
  • if applicable, site surveys and chemists' analyses of wastes received for disposal
  • the total tonnage of waste you accept for landfill disposal, with separate entries for standard-rated, lower-rated and exempt wastes
  • if applicable, a record of loads accepted under each authorisation to receive waste under the former exemption for contaminated land, and
  • any other documents required by this notice or any other notice published by us.

You must also keep these records from the date of your registration.


14.2 For how long must I preserve my records?

With the exception of the bad debt account (which you need to preserve for five years), you will need to preserve your Landfill Tax records for six years. This includes waste transfer notes even though environmental law only requires their preservation for two years. If, however, this causes you storage problems, involves you in undue expense or causes you other difficulties, you can ask us if you can preserve some of your records for a shorter period. You should always seek our agreement before destroying any of your records if they are less than six years old.

14.3 How may I store my records?

As long as your records meet the requirements we lay down you can keep them in whatever format - paper and/or electronic - that you prefer, for example:

  • computer hard drive
  • magnetic tape
  • flash drive or memory stick, or
  • CD or DVD.

Whatever format you decide on, you must make sure that your records are easily accessible to us when we visit. If you keep your records on a computer and you upgrade to a new computer system which is not compatible with your old system, you must make sure that the records held on your old system remain accessible for up to six years. If this is not possible, then you must make paper copies.

14.4 When must I produce my records?

You must be able and prepared to make your records available to us when we ask to see them. You must also provide any information we request about your taxable activities. We will occasionally visit your premises to audit your records, your accounting systems and your business. We will usually make such visits by appointment, at a time that is convenient for you.

15 Errors found in records

15.1 What if I find errors in my Landfill Tax records?

Where you find that your Landfill Tax records contain errors, you will need to correct them.

Where an error has led to a mis-declaration on a Landfill Tax return you have already sent to us, you can correct the error by following paragraph 15.3.

If you deliberately fail to correct an under-declaration of Landfill Tax, you may be liable to a civil penalty for dishonest evasion, a civil penalty for deliberate inaccuracy or criminal prosecution. For more information on the civil evasion penalty, see paragraph 16.9. For more information on the inaccuracy penalty, please see paragraph 16.9. For more information on whether we would follow the civil or criminal option, see paragraph 16.15.

15.2 What if I record or calculate my Landfill Tax incorrectly?

If you discover you have recorded an entry in your business records incorrectly and ...


then ...


you have not yet completed your Landfill Tax account or return for the period in which you made the error


you can correct the error by amending your records. Simply keep a clear note to show the reason for the error, and include the correct Landfill Tax figure in your Landfill Tax account for the same period.


(The correct Landfill Tax figure will then work its way through to your Landfill Tax return, as normal.)


you have already sent us your return


you will need to correct the error as stated in paragraph 15.3.


15.3 Correcting Landfill Tax errors on a return already submitted

If on any of your previous returns you declared the wrong amount of tax, you can include errors of £10,000 or less in box 2 (under-declarations) or box 4 (over-declarations) of your Landfill Tax return (see paragraph 13.1). You can also include errors above £10,000 up to a maximum limit of £50,000, provided the errors are not over 1% of the box 6 turnover figure (before correction) of your VAT return for the VAT return period in which you are making the correction. If you are not VAT registered the limit is £10,000.

If the net amount for box 2 or box 4 of the return is over these limits or you have made a deliberate error, do not include the amount on this return. Instead you must notify HMRC of an error correction in writing and send the error correction notification to the Central Collection Unit at the address in paragraph 12.8. You must set out the amount of the error(s), what accounting period(s) it/they relate to and explain how the error(s) occurred. Under-declarations and over-declarations should be shown separately. We will then write to you telling you how much tax you owe and how to pay.

You must make any corrections within four years of the accounting period in which the error was made.

If you do not correct your errors or follow the correct procedures for correcting errors you may be liable to a penalty (see paragraph 16.7).

15.4 What if the errors mean that I have overpaid tax?

If, because of past errors, you believe that you have overpaid tax you may make a claim to us for this tax incorrectly paid subject to the conditions set out below.

Claims can be made in two ways: by adjustment to the current Landfill Tax return, or by submitting a written claim to us.

Where you are registered for VAT, you may make an adjustment to your current Landfill Tax return, but the value of the errors must not exceed the greater of:

  • £10,000, or
  • 1% of the box 6 figure on your VAT returns for the VAT return period of discovery, subject to an upper limit of £50,000.

If you are not liable to be registered for VAT there is a single error limit on the current Landfill Tax return of £10,000.

Where the errors exceed these limits, you should submit a written claim to us (in these cases the errors must not be corrected through your returns). In any case, it is open to you not to seek a repayment through an adjustment to your Landfill Tax return but instead by means of a written claim.

A written claim should include the following information:

  • a statement of the amount being claimed, and
  • the method of calculation, in as much detail as possible.

The following information should also be included to substantiate your claim:

  • the reason for your claim
  • the prescribed accounting periods in respect of which your claims are being made, allocating amounts to periods
  • the dates on which any overpayments, over-declarations or under-claims were made and, if the overpayment was made relating to an assessment or voluntary disclosure, the date on which the assessment or disclosure was made, and
  • details of all documents, schedules, and so on. used in support of your claim.

along with:

  • a claim for statutory, simple interest (where you believe you are entitled to make one), and
  • your bank account name, number and sort code (where you wish a repayment to be credited to your bank account).

We are not liable to repay any amount of tax paid to us more than four years before the making of the claim.

Contributions to environmental bodies made as a result of any overpayment of tax will be taken into account and credits in respect of such contributions will not operate to reduce the amount of tax that can be claimed. Otherwise, claims will be paid or credited on a net basis, that is, those amounts paid to us. If, for instance, in a given accounting period the tax due to us was reduced, because you subsequently claimed a credit in respect of bad debts or other credits, the amount of tax you claim should be reduced accordingly.

16 Penalties and interest

16.1 Failure to register or deregister

Penalty for failure to notify where you are required to notify HMRC that you should be registered before 1 April 2010

If you fail to register at the correct time (see paragraph 12.1), you may be liable to a penalty equal to £250 or 5% of the tax involved, whichever is the greater. The tax involved is the amount of tax for which you are liable. This is calculated from:

  • the date you are required to be registered, to the date we actually receive notification of your liability to be registered, or
  • the date we became aware of your requirement to be registered.

You will, of course, also be required to pay the tax involved. You will not be liable to a penalty, however, if you can satisfy us (or, on appeal, a Tribunal) that you have a reasonable excuse for the failure.

You must notify us if you no longer have the intention to carry out taxable activities for Landfill Tax purposes. If you fail to do so you are liable to a penalty of £250.

Penalty for failure to notify where you are required to notify HMRC that you should be registered on or after 1 April 2010

You will be liable to a late notification penalty based on the same requirements as before 1 April 2010.

However, if you discover that you should have notified HMRC and inform us, we will allow reductions for this disclosure in place of the mitigation provisions in paragraph 16.11.

The more you tell HMRC and help to establish the amount of tax due, including access to your records, the more the penalty can be reduced.

You can find more information on how this penalty is calculated (or how it may be reduced) in Factsheet 11.

Penalty for failure to notify that you are no longer liable to be registered

If you fail to notify us that you are no longer liable for registration at the correct time you may be liable to a penalty of £250.

16.2 Failure to notify us about a controller of a landfill site

For more information about who is a controller of a landfill site, see paragraph 2.6.2. If a person becomes, or ceases to be a controller, both you and the controller must notify us within 30 days of the change. If you both fail to do so then that person is liable to a penalty of £250.

16.3 Failure to preserve records

If you are registered for Landfill Tax you must have certain records and must preserve them for certain periods of time (see section 14). If you fail to do so you are liable to a penalty of £250. You will not be liable to a penalty, however, if you can satisfy us (or, on appeal, a Tribunal) that you have a reasonable excuse for the failure.

16.4 Failure to produce information and records

If you are involved, in any capacity, with any landfill disposal (for example, as a site operator, waste haulier or waste producer) you must, if required by us, furnish information and produce documents relating to the disposal. Failure to do so will render you liable to a penalty of £250. If you continue to fail to comply you are liable to a penalty of £20 for each day after the date that the initial penalty was imposed. You will not be liable to a penalty, however, if you can satisfy us (or, on appeal, a Tribunal) that you have a reasonable excuse for the failure.

16.5 Failure to comply with the regulations

Breaches of regulations other than those specified above will make you liable to a penalty of £250. You will not be liable to a penalty, however, if you can satisfy us (or, on appeal, a Tribunal) that you have a reasonable excuse for the failure.

16.6 Controlled goods agreement

(Walking Possession Agreements in Northern Ireland)

Note:This paragraph does not apply in Scotland.

If you fail to pay any tax due, or any amount recoverable as tax due, we or a bailiff may visit your premises andtake control of goods, for example equipment and vehicles. This procedure allows us to remove and sell your possessions if a debt remains unpaid. Providing that you give a written undertaking not to remove or allow the removal of those possessions, we may agree to leave them in your custody and to delay their sale. This is called a controlled goods agreement. If you breach the agreement you will render yourself liable to a penalty equal to half of the tax due (or any amount recoverable as tax due).

You will not be liable to a penalty, however, if you can satisfy us (or, on appeal, a Tribunal) that you have a reasonable excuse for the failure.

16.7 Penalties and interest on under-declared tax

Penalty for under-declarations/failure to notify an under-assessment for accounting periods starting before 1 April 2009 or for accounting periods starting after this date where the due date is before 1 April 2010

If we discover that you have under-declared the tax or over-claimed credit on your return you may be liable to pay a misdeclaration penalty equal to 5% of the amount of tax under-declared or over-claimed. This also applies if you fail to send in a return and then fail to tell HMRC that an assessment we send you is too low for that return.

In addition you will be liable to interest from the date on which the tax was due for payment until the day before the date shown on the assessment documentation. If you fail to pay this assessment on time you will also be liable for penalty interest for the period from the day the assessment is notified until the day before the outstanding amount is paid in full.

You will not be liable to a penalty, however, if you can satisfy us (or on appeal, a tribunal) that you have a reasonable excuse.

Penalty for under-declarations/failure to notify an under-assessment for accounting periods starting on or after 1 April 2009 where the due date is on or after 1 April 2010

If we discover that you have under-declared the tax due or over-claimed credit on your return you may be liable to pay a tax geared penalty based on a percentage of the amount of tax under-declared or over-claimed.

This also applies if you fail to send in a return and then fail to tell HMRC that an assessment we send you is too low for that return.

In addition you will be liable to interest from the date on which the tax was due for payment until the day before the date shown on the assessment documentation. If you fail to pay this assessment on time you will also be liable for penalty interest for the period from the day the assessment is notified until the day before the outstanding amount is paid in full.

You can find more information on how a penalty is calculated (or how it may be reduced) in factsheet CC/FS7- compliance checks - Information about penalties from the HMRC website.

16.8 Penalty interest

If you do not pay tax due on a return or any assessed tax, penalty or interest on time, you are liable to penalty interest on the amount involved. The rate of penalty interest is ten percentage points higher than the normal interest rate and is compounded monthly while the debt remains unpaid.

16.9 Evasion of tax

If you are a registrable person and, for the purposes of evading tax, you do any act or omit to take any action, and your conduct involves dishonesty, you will render yourself liable to a penalty equal to the amount of tax evaded or sought to be evaded. You will also be liable to pay the amount of the tax evaded or sought to be evaded.

16.10 Error corrections

Error corrections in relation to returns for accounting periods starting before 1 April 2009 or for accounting periods starting after this date where the due date is before 1 April 2010

If you notify an error correction to us (at a time where you have no reason to believe that enquiries are being made into your Landfill Tax affairs) that you have under-declared tax or over-claimed credit, you will not have to pay a 5% misdeclaration penalty. Enquiries would begin when, for example, we make an appointment to inspect your records. However, you will be charged interest from the date at which the tax was due for payment until the day before it is paid in full. You may include cumulative net under-declarations from previous returns of amounts not exceeding £10,000 or the limit as described in paragraph 15.3 on your return without incurring interest.

Error corrections in relation to returns for accounting periods starting on or after 1 April 2009 where the due date is on or after 1 April 2010

If you make errors over the limits described in paragraph 15.3 or you make any deliberate error you must notify us about your error. You may be liable to an inaccuracy penalty if your error is careless or deliberate.

You may be charged interest from the date at which the tax was due for payment until the day before it was paid in full. You may include cumulative net underdeclarations from previous returns of amounts not exceeding £10,000 or the limit described in paragraph 15.3 on your return without incurring interest.

If you make a careless error or an error despite taking reasonable care you may include the error in your next return provided it is within the limit described in paragraph 15.3.

You can find more information on how a penalty is calculated (or how it may be reduced) in factsheet CC/FS7- compliance checks - Information about penalties from the HMRC website.

16.11 Mitigation of penalties

We or a tribunal have the power to mitigate penalties. If a person can satisfy us or a tribunal that there is a reasonable excuse for any breach, failure or other conduct which resulted in the penalty being assessed, this may be taken into account when considering mitigation.

16.12 Reasonable excuse

Some penalties have a legal provision where a reasonable excuse may be considered by HMRC or the tribunal.

A reasonable excuse cannot arise where:

  • there are insufficient funds for paying any amount
  • any other person is relied on to perform any task
  • there is a non-deliberate failure to notify where the person had a reasonable excuse; and
    the excuse has ceased.

In these circumstances the person will not be treated as having a reasonable excuse if the failure is not remedied without unreasonable delay after the excuse ceased.

16.13 When we will pay you interest

If we make an error which results in you paying too much tax, we are liable to pay you interest. You must apply in writing to us within four years of the date we authorised payment of the amount you are claiming interest on.

16.14 Security for the tax

We may require a registrable person to provide security for payment of the tax as a condition of carrying out taxable activities. We will only do this where we believe that it is necessary for the protection of the revenue. The amount of security will be based on to the amount of tax estimated to be at risk.

We will normally accept security in the following forms:

  • cash or bankers draft
  • a performance bond from an approved financial institution which is payable on demand or
  • joint bank or building society account.

Please note: a performance bond must be signed and witnessed by an authorised person on behalf of the financial institution and an officer of HMRC.

Further information about the circumstances where we may require security and the accepted forms of security is available in Powers to prevent non-payment of tax.

Where you have been required to provide security, and do not do so, it is a criminal offence to carry out taxable activities.

16.15 Criminal offences and civil penalties

There is a range of criminal offences and civil penalties that relate to Landfill Tax. We would normally expect to use the civil rather than the criminal option except in cases of serious fraud.

17 Reviews and appeals

17.1 Can I request a review of or appeal a decision?

Our review and/or appeal procedure is available to anyone who is, or will be affected by a decision covered by paragraph 17.2. This could be, for example, an operator of a landfill site, or an EB.

17.2 Scope of the review/appeal procedure

The review, and/or the appeal, procedure is available for any of the following decisions:

  • to register you or cancel your registration
  • as to whether tax is chargeable in respect of a disposal or as to how much tax is chargeable
  • as to whether you are entitled to a credit of tax or how much any credit should be
  • to revoke the approval of an environmental body that fails to comply with its requirements under the Landfill Tax Regulations 1996
  • to assess you for under-declared tax due and the amount of such an assessment (normally you must file the tax return and pay the disputed tax before any appeal can be heard by the Tribunal. If paying the tax would cause you hardship you may ask us not to collect the tax while the appeal is continuing - if you think this applies you should tell us)
  • to refuse your application for a divisional registration
  • as to whether you have met the conditions laid out in a special method for calculating weight
  • to withdraw from you a special method for calculating weight
  • to refuse your claim for repayment of tax
  • as to your liability to, or the amount of, any civil penalty
  • as to your liability to pay, or the amount of, any interest or penalty interest
  • to require you, as a condition of trading, to give us security for the payment of any tax which is or may become due from you
  • as to your liability to pay interest or the amount payable
  • to assess you for an amount that we repaid to you in error
  • as to whether a person is a 'controller' of a landfill site, and
  • as to whether a 'controller' is liable to pay any amount, not entitled to an allowance, or the amount of any liability or any allowance.

17.3 Where can I get more information about reviews and appeals?

Factsheet HMRC 1 HM Revenue & Customs decisions - what to do if you disagree gives more information about review and appeal rights. You can get this factsheet by:

  • downloading it from our website HMRC1, or
  • phoning our orderline on 0845 900 0404.

18 Summary of the Landfill Tax (Qualifying Material) Order 2011

18.1 Extract from the Order Qualifying Material

Group


Description of material


Conditions


Notes


1


Rocks and soils


Naturally occurring


Group 1 comprises only


i. rock


ii. clay


iii. sand


iv. gravel


v. sandstone


vi. limestone


vii. crushed stone


viii. china clay


ix. construction stone


x. stone from the demolition of buildings or structures


xi. slate


xii. sub-soil


xiii. silt


xiv. dredgings.


2


Ceramic or concrete materials


 

Group 2 comprises only


i. glass, including fritted enamel


ii. ceramics, including bricks, bricks and mortar, tiles, clay ware, pottery, china and refractories


iii. concrete, including reinforced concrete, concrete blocks, breeze blocks and aircrete blocks


Group 2 does not include


i. glass fibre and glass-reinforced plastic, and


ii. concrete plant washings.


3


Minerals


Processed or prepared


Group 3 comprises only


i. moulding sands, including used foundry sand.


ii. clays, including moulding clays and clay absorbents (including Fuller’s earth and bentonite)


iii. mineral absorbents


iv. man-made mineral fibres, including glass fibres


v. silica


vi. mica


vii. mineral abrasives.


Group 3 does not include


i. moulding sands containing organic binders


ii. man-made mineral fibres made from glass-reinforced plastic and asbestos.


4


Furnace slags


 

Group 4 comprises only


i. vitrified wastes and residues from thermal processing of minerals where, in either case, the residue is both fused and insoluble, and


ii. slag from waste incineration.


5


Ash


 

Group 5 comprises only


i. bottom ash and fly ash produced only from the combustion of wood, of waste or of both;


ii. bottom ash and fly ash from the combustion of coal, of petroleum coke or of both, deposited in a cell containing the product of that combustion and burning alone, and


iii. bottom ash and fly ash from the combustion of coal, of petroleum coke or of both, burnt together with biomass and deposited in a cell containing the product of that combustion and burning alone.


Group 5 does not include fly ash from sewage sludge, municipal, clinical and hazardous waste incinerators.


6


Low activity inorganic compounds


 

Group 6 comprises only


i. calcium based reaction wastes from titanium dioxide production


ii. calcium carbonate


iii. magnesium carbonate


iv. magnesium oxide


v. magnesium hydroxide


vi. iron oxide


vii. ferric hydroxide


viii. aluminium oxide


ix. aluminium hydroxide


x. zirconium dioxide.


7


Calcium sulphate


Disposed of in landfills for non-hazardous waste in a cell where no biodegradable waste is accepted


Group 7 includes


i. calcium sulphate


ii. gypsum


iii. calcium sulphate based plasters.


Group 7 does not include plasterboard.


 

Calcium hydroxide and brine


Deposited in brine cavity.


 

18.2 Lower rating criteria

In drawing up wastes to be listed in its lower rate Order, the Treasury will have regard to the criteria set out below. These are the principles that guide the Treasury’s considerations - a waste will be lower rated for Landfill Tax from 1 April 2011 only if it is listed as a qualifying material in the Landfill Tax (Qualifying Material) Order 2011, as amended.

Non-hazardous

Wastes which are not 'hazardous’ within the meaning of the revised Waste Framework Directive (2008/98/EC).

Low potential for greenhouse gas emissions

Wastes which are not biodegradable, have a low organic content or do not break down under the anaerobic conditions that prevail in landfill sites to produce methane. These include inert waste within meaning given under the Landfill Directive; and waste with little or no organic content such as inorganic residues or completely combusted residues from the incineration of biodegradable/organic wastes.

Low polluting potential in the landfill environment

  • Waste where the contaminants are unlikely to become mobile in the landfill and any leachate produced has little or no pollution potential
  • Where the pollution potential of the waste is reduced if deposited alone in mono-fill landfill sites or within separate cells (not mixed with other wastes) within a landfill site
  • The engineering requirements for the landfill are lower that would be the case for a non-hazardous landfill (as laid out in the Landfill Directive) by virtue of a risk assessment agreed with the regulator.
  • The aftercare period and requirements are significantly lower than would normally be required for a non-hazardous waste landfill, based on a risk assessment agreed with the regulator.

19 Example of a completed landfill invoice

(Referred to in sections 6 and 8 of this notice)

Site Operator

4 Boxes Landfill Site

Holly Lane

Westford, XX1 2XX

To:


A Customer


Truck Hire


Ridgeway


Westford, XX1 3YY


 

Landfill Tax Registration No: 01010 0151 03030


VAT Registration No: 010 0151 03


Invoice No: SW 34


Date of Issue: 31.04.2012


Date of disposal


   

£


18.04.2012


Municipal waste Y664 TRL 5 tonnes


Charges


125.00


18.04.2012


Inert waste Y663 YGR 7.5 tonnes


Charges


187.50


 

5 tonnes @ £64 per tonne


Landfill Tax (Standard Rate)


320.00


 

5 tonnes @ £2.50 per tonne


Landfill Tax (Lower Rate)


12.50


 

mining waste @ 2.5 tonnes


Landfill Tax (Exempt)


0.00


   

Net total


645.00


   

VAT @ 20%


129.00


   

Total


774.00


The Landfill Tax on this invoice is not recoverable as VAT input tax


20 Landfill tax return and completion notes

Your rights and obligations

Your Charter explains what you can expect from us and what we expect from you. For more information go to Your Charter.

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:

HM Revenue & Customs
Environmental Taxes Team
3rd Floor West, Ralli Quays
3 Stanley Street
Salford
M60 9LA

Please note this address is not for general enquiries.

For your general enquiries please phone our Helpline 0845 010 9000.

Putting things right

If you are unhappy with our service, please contact the person or office you have been dealing with. They will try to put things right. If you are still unhappy, they will tell you how to complain.

If you want to know more about making a complaint go to hmrc.gov.uk and under quick links, select Complaints and appeals.

How we use your information

HMRC is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:

  • check the accuracy of information
  • prevent or detect crime
  • protect public funds.

We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HMRC unless the law permits us to do so. For more information go to hmrc.gov.uk and look for Data Protection Act within the Search facility.

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$START-DATA$ title=A general guide to Landfill Tax^ summary=This notice provides a general guide to landfill tax. This is a tax on the disposal of waste to landfill. As such, it encourages efforts to minimise the amount of waste produced and the use of non-landfill waste management options, which might include recycling, composting and recovery.^ doctype=PublicNotice^ date=06-May-2014^ author=FC6028027^ $END-DATA$
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