The Budget documents reveal a rise in the landfill tax contribution cap paid by landfill operators to the Landfill Communities Fund (LCF) – from 5.1% to 5.7%.
The potential value of the LCF for 2015-16 is now £59.4m of claimable landfill tax credit. This equates to a change of about £4.2m, which will be used to fund a “one-off” increase in Environment Agency (EA) funding to address waste crime.
The EA currently has about £5m to spend over two years and concerns have been raised that those funds will not last.
Viridor, one of the UK’s largest recycling, resources and renewable energy companies, welcomed the announcement.
Viridor – “Today’s announcement of a one-off increase in Environment Agency funding to crack down on waste criminals is therefore welcome indeed. But waste crime isn’t a one-off quick win and needs sustained support and resourcing”
Dan Cooke, Director of External Affairs, Viridor, said: “Europe has thrown away old thinking about waste and is recognising its value as a resource. With the general election fast approaching, today’s budget offers only limited recognition of the opportunities a modern resource sector can bring.
“Britain urgently needs to resource the fight against rising waste crime which threatens the sector’s development and our economic and environmental interests. Today’s announcement of a one-off increase in Environment Agency funding to crack down on waste criminals is therefore welcome indeed. But waste crime isn’t a one-off quick win and needs sustained support and resourcing.
“With the sector at a point of inflexion, the budget was a missed opportunity to support the next wave of infrastructure investment needed to create 50,000 new jobs, deliver resources for UK manufacturing, enhance UK resource and energy security and skill a new generation of engineers and scientists.”
Landfill tax rates: Legislation will be introduced in Finance Bill 2015 to increase the standard and lower rates of landfill tax in line with RPI, rounded to the nearest 5 pence, from 1 April 2016.
Value of landfill communities fund: A statutory instrument laid on 18 March 2015 will set the potential value of the landfill communities fund (LCF) for 2015-16 at £59.4m of claimable landfill tax credit.
This will be achieved by amending the maximum credit that landfill site operators may claim against their annual landfill tax liability for LCF contributions made to environmental bodies from 5.1% to 5.7% from 1 April 2015.
The government will also consult on proposals aimed at ensuring the Landfill Communities Fund is spent on community projects as quickly and efficiently as possible.
Landfill tax loss on ignition testing: As announced at Autumn Statement 2014, legislation will be introduced in Finance Bill 2015 to introduce a loss on ignition testing regime from 1 April 2015.
Two statutory instruments and tertiary legislation setting out the technical specifications were published in draft in February and will come into force at the same time. A Tax Information and Impact Note was published on 10 December 2014.
ESA – “An objective LOI test will go a long way to prevent the misclassification of waste, which has been so costly to responsible operators and to the UK’s economy”
The Environmental Services Association (ESA) welcomed the Chancellor’s confirmation in the 2015 Budget statement that a Loss on Ignition (LOI) testing regime for waste “fines” will be implemented from 1 April this year.
ESA’s Head of Regulation, Sam Corp, said: “ESA and its members have been working closely with HMRC and Treasury officials over the last two years to develop the testing regime.
“An objective LOI test will go a long way to prevent the misclassification of waste, which has been so costly to responsible operators and to the UK’s economy.
“We hope that the Chancellor’s announcement will give operators the assurance they need to put in place the necessary measures to implement the regime from 1 April.”
Corp continued: “ESA applauds the government’s announcement in today’s budget to provide an additional £4.2m to fight waste crime.”
“The government has already shown it is committed to tacking this issue with the £5 million additional funding previously announced, and with the recent launch of its consultation on a package of measures to tackle waste crime and poor performance. However, tackling waste crime requires ongoing resourcing and whilst the additional funding is very helpful we would also welcome a long term commitment to fund this important work.
“It is vital that regulators use this additional funding effectively to crack down on waste crime which blights local communities, causes environmental and public health problems, as well as draining the UK economy of nearly £600m each year in clean up costs and lost tax revenues.”
Chief executive Steve Lee said: “Waste crime is a serious issue. As the cost to legitimate and responsible operators of legally treating and disposing of waste has increased, so has the incentive for criminals to risk prosecution for higher rewards.
“Leaving aside the potential environmental damage caused by waste crime, there is increasing concern about the economic impacts. Reduced Government landfill and corporation tax and VAT, clean-up, nuisance and disamenity costs affect all of society, as well as undermining the reputation of our sector and the contribution it can make to green growth and jobs.”
“On littering, however, it is disappointing that the Government did not take up the recommendation of the Communities and Local Government (CLG) Committee to set aside a proportion of any increase in tobacco levies to help local councils pay for the clean-up of cigarette related litter.
“This would have sent a strong signal that the Government is committed to supporting local government in its efforts to maintain local environmental quality in times of constrained budgets.”