The Landfills Dispoasal Tax for Wales Bill was introduced to the National Assembly on 28th November - Royal assent is anticipated in the summer of 2017.
From April 2018, landfill disposals tax will replace landfill tax in Wales. Like landfill tax, landfill disposals tax will be a tax on the disposal of material as waste to landfill and will be charged by weight. It will be payable by landfill site operators, who pass on these costs to waste operators through their gate fee. This new tax will be broadly consistent with the existing landfill tax – there will be similar processes and an approach to tax rates, which will provide stability and reassurance to businesses and minimise the risk of waste tourism.
This new legislation is designed to be up to date, simple and clear to apply, reflecting established practices and relevant to Wales. It is aiming for clarity and is addressing aspects of the existing tax which may be confusing or cause uncertainties. There are opportunities for making changes to better reflect Welsh circumstances and needs.
The tax is intended to continue the fight against illegal waste disposal and also related tax evation. So in Wales Landfill disposals tax will also be charged on unauthorised disposals of waste. The Bill will establish a third tax rate – the ‘unauthorised disposals rate’ – this is expected to be higher than the standard tax rate. Reliefs and credits will not be applied. Specific investigatory powers will complement those currently in the Tax Collection and Management (Wales) Act 2016 to ensure the Welsh Revenue Authority is able to identify those who are responsible for paying the tax and calculate the tax due.
The current Landfill Tax has two rates: a lower rate for qualifying materials (currently set at £2.65/tonne) and a standard rate (currently set at £84.40/tonne) for all other materials. These are expected to be maintained in real terms (by the rate of inflation as measured by the Retail Price Index) until at least 2019-20. The Scottish Government has set the same tax rates as HMRC. The landfill disposals tax rates will be set in autumn 2017, in readiness for the implementation of landfill disposals tax in April 2018. It is recognised that consistency with the UK, particularly England, will be important. The tax will be collected and managed by the Welsh Revenue Authority working with Natural Resources Wales on the compliance and enforcement of the tax.
Landfill tax has contributed to a significant reduction in the amount of waste sent to landfill. The existing 25 landfill sites in Wales are expected to be reduced to fewer than 10 by 2020 resulting in a fall of revenue from £34m in 2015-16 to £27m in 2018-19 (forecast from the Office of Budget Responsibility). A Landfill Disposals Tax Communties Scheme will be set up to replace the existing Landfill Communities Fund. It is hoped the new scheme will have simpler administration demands and will thus maximise the amount of funding the scheme is able to direct to community projects, such as will benefit biodiversity, waste minimisation and wider environmental enhancements. The scheme is being developed with stakeholders including landfill site operators and the third sector.