Detailed guide: Landfill Tax: rates, exemptions and taxable activities

Updated: Rates for Landfill Tax have been updated for 2017 to 2018 tax year.

Overview

You’ll have to pay Landfill Tax if you operate a landfill site that has 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))
regulations under Article 4 of the Environment (Northern Ireland) Order 2002 (SI 2002 No. 3153 (N.I. 7))

Occasionally, the licence or permit holder for the landfill site isn’t directly involved with operating it. In these cases the ‘controller’ of the site is jointly and severally liable for Landfill Tax.

Aside from exemptions, you need to pay Landfill Tax on all material disposed of at your site:

as waste – this is any disposal a person makes with the intention of discarding the material
by way of landfill – where material is deposited on the surface of your land, on a structure set into the surface, or under the surface

You’ll need to register with HM Revenue and Customs (HMRC) if you need to pay Landfill Tax.

Taxable activities

You need to pay Landfill Tax on material used in a number of taxable activities on the landfill site. If you’ve already paid Landfill Tax on the materials you use in these activities, you won’t need to pay a second time.

Activity description	What is taxable	What isn’t taxable
Daily cover	Material used to cover the disposal area while it’s temporarily not being used.	Mineral material used around the side or bottom of a disposal area, or used to permanently cap it.
Temporary haul roads	Material used to create of maintain a temporary road haul.	Material used to create or maintain a permanent road.
Temporary hard standings	Material used to form the base where waste recycling, treatment or other similar activities take place.	Material used to create or maintain a permanent hard standing.
Temporary screen bunds	Material used to create or maintain a structure that reduces the visual or noise impact of individual activities on site.	Material used to create or maintain a structure that performs a function for the landfill site as a whole, or using material that naturally occurs at the site.
Drainage layer/liner protection	Soft material (such as household waste) placed against the drainage layer or liner of the disposal area to prevent damage to the layer or liner.	No tax exemptions.
Temporary storage of ashes	Including pulverised fuel ash and furnace bottom ash, designed so the ashes can be retrieved for use or permanent disposal.	No tax exemptions.
Other site restoration materials	You need to tell HMRC which area material will be deposited in – if it’s not deposited in this area you’ll need to pay Landfill Tax.	No tax exemptions.

Rates

There are 2 different rates of Landfill Tax:

less polluting wastes as listed in the Landfill Tax (Qualifying Material) Order 2011 – £2.70 per tonne
all other wastes – £86.10 per tonne

Loss on Ignition (LOI) testing regime

The ‘Loss on Ignition’ (LOI) testing regime was introduced on 1 April 2015 to improve compliance by helping prevent mis-description of waste fines for landfill tax purposes.

If your landfill site accepts waste fines, you may need to carry out a loss on ignition test to help determine the rate of tax to pay.

From 1 April 2015 to 31 March 2016:

if the LOI is 15% or less, the lower rate of £2.60 is charged
if the LOI is more than 15% the standard rate of £82.60 is charged

From 1 April 2016:

if the LOI is 10% or less, the lower rate of £2.65 is charged
if the LOI is more than 10% the standard rate of £84.40 is charged

More information on the LOI testing regime can be found at Excise Notice LFT1: a general guide to Landfill Tax.

Mixed loads

You’ll normally pay the standard rate for mixed loads, unless there’s an incidental amount of standard waste in a mainly lower rate load. For example:

sub-soil with small quantities of grass
sub-soil and stone from street works containing tarmac
mineral dust packaged in polythene bags
bricks, stone and concrete with small amounts of wood and plaster

You need to justify any decisions you make to apply the lower rate to mixed loads. This will usually be based on the size of the standard rated waste it contained and the difficulty in separating it from the rest of the load.

Exemptions and claiming back tax

The following areas of waste are exempt from Landfill Tax, provided that all the required circumstances are met:

You can also claim back Landfill Tax you have previously paid when:

Source: HMRC