HMRC has published interim guidance on the lower rate of Landfill Tax aimed at clarifying a number of concerns across the waste industry
The interim guidance provides further clarification regarding the tax liability of loads or consignments of fines and construction/demolition soils and additional detail on the evidence required to demonstrate that material qualifies for the lower rate of tax top apply.
Extending on the text of Notice LFT1 in order to provide additional clarification, it states: "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."
On defining lower rates it states: "A consignment of waste sent to landfill will be taxed at the lower rate of Landfill Tax when it consists only of materials which are listed in the Schedule to the Landfill Tax (Qualifying Material) Order 2011 ("the 2011 Order"), as long as the conditions set out in column 3 of the Schedule1 and any note to that group of material in the 2011 Order are met.
"The lower rate also applies where the consignment sent to landfill consists of a number of different qualifying materials, including qualifying materials from different Groups within the 2011 Order. For example, this means that:
For loads or consignments of materials which are commonly referred to as "trommel fines" or "fines", the lower rate will apply only where the fines that come out of the trommel/automated process constitute those materials or a mix of those materials included within the 2011 Order. By a mix of materials we mean a mix of qualifying materials from different Groups within the 2011 Order.
For loads or consignments of construction soils and soils from demolition of buildings or structures, the lower tax rate will apply only where all the materials in the load being landfilled are included within the 2011 Order. (This example has been added to correct paragraph 2 of section 4.1 of Brief 18/12 "Rocks and soils", which implied that such soils are always contaminants.)
HMRC has also confirmed that it is working on further guidance, to be delivered before the end of the summer, on a number of issues including:
The definition of "naturally occurring" in Group 1 of the 2011 Order;
More objective evidential requirements, including those relating to 'incidental' amounts of non-qualifying material in a load that is essentially of qualifying material;
Guidance on the conditions that must be met where lower rated waste, used for the purposes of filling existing or former quarries, and qualifies for exemption from Landfill Tax.
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