Recently released HMRC Figures show that the amount of solid waste recorded as being taxed at the Standard Rate of Landfill Tax has fallen from 52.465 million tonnes in the 2001 calendar year to 18.987 million tonnes in 2012. Generally speaking, the Standard Rate of Landfill Tax covers non-inert (‘active’) solid waste (municipal, commercial and industrial).

Landfill data based on HMRC Landfill Tax (LFT) Bulletin - January 2013

Landfill data based on HMRC Landfill Tax (LFT) Bulletin – January 2013

It is worth noting that the wet summer of 2012 produced an autumn rise. Also note that some of the decline may be attributable to the WRG litigation case, overall there has been a steady downward trend in standard rate landfilling.

When you look at the detailed report you see the Treasury income from Landfill Tax is generally declining despite the increase in the Standard Rate of Landfill Tax from £11 in 2001/02 to £64 in 2012/13.

As UKWIN reported in September 2012, this tax take trend has resulted in one industry professional commenting that an incineration tax could be the way that the Government responds to falling Landfill Tax returns, stating that: “for a government approaching the event horizon of a financial black hole its attraction could be irresistible”.

UKWIN is in favour of both an incineration tax and a middle-rate of Landfill Tax for waste stabilised through MBT and for Incinerator Bottom Ash (IBA) waste. The prospect for such a middle-rate of Landfill Tax for Scotland was discussed in Protecting Our Resources – Consultation on a Scottish Landfill Tax, which stated that: “…as the Waste (Scotland) Regulations 2012 will see non-stabilised organic material banned from landfill, should consideration be given to the longer term introduction of new differential rates for stabilised materials or for combustion residues (bottom ash) from incineration?”

This comment could at least somewhat be based on the 2008 Eunomia report “Biostabilisation” of Waste: Making the Case for a Differential Rate of Landfill Tax which “…puts forward the case for ‘biostabilised’ wastes from MBT facilities receiving the same level of taxation as incinerator bottom ash and soils, which can be shown to have similar externalities when sent to landfill”.

The Eunomia report was cited in the Partial Business and Regulatory Impact Assessment of the Landfill Tax Bill 2012 which stated that: “…modelling indicates that where waste is stabilised prior to being landfilled, the impact falls to around £15 per tonne. This approach was used to argue in favour for reduced landfill taxes being applied to such materials…”

For more information regarding incineration taxes, see:

  1. UKWIN’s written evidence to the Environmental Audit Committee (October 2012) (and the Audit Committee’s response)
  2. UKWIN’s response to ESA critique of incineration taxes (November 2012)
  3. UKWIN’s letter to George Osborne calling for a Residual Waste Tax (February 2012)
  4. ‘European Environment Commissioner calls for incineration limits’, a UKWIN article  which highlights the European support for incineration taxes

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