We recently asked the HMRC when we should apply the standard rate of landfill tax (LFT), currently £102.10/tonne (as of April 2023), when disposing of contaminated soils and when the lower rate of £3.25/tonne (as of April 2023) should be levied. The reason being that when remediating sites we’re often asked to provide rates for offsite disposal, and taxation is an important part of the decision making process between the use of our soil treatment centre and straight forward disposal to landfill.
HMRC guidance ‘LFT1’, which I’m sure your all familiar with (!!!), states in section 3.3 that…”you may ignore the presence of an incidental amount of standard rate waste in a mainly lower rated load, and treat the whole load as taxable at the lower rate”.
So the question we put to them was “what constitutes incidental”…?
The reason being that many landfill operators appear to be using the unproven assumption that if a material passes the criteria for disposal into landfills for inert waste, then the material can be granted the lower rate of taxation as it is deemed to have an ‘incidental amount of standard rated waste’.
This approach disregards HMRC Brief 18/12, which states that if a waste contains elevated levels of chemical contaminants (heavy metals, hydrocarbons) then it remains liable for the standard rate of LFT. But what is ‘elevated’…? Is this the same thing as ‘incidental’…?
Also, for Japanese Knotweed disposal some operators are using 5% content as the trigger level for when the standard rate applies and below for when the lower rate applies. An approach which is has not formally been agreed with the revenue.
Well, it looks like this is a lively topic with HMRC as they responded quickly but are unable to provide an immediate answer to our enquiry as there are “currently high level discussions going on about the level of ‘incidental’ amount of standard rate material”. So watch this space as we’ll post further info as we hear of it.
So if you are planning to dispose of material at the lower rate of LFT please beware…!
If you need any advice we’re only a call away 0800 0209 307.
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