Question in The House of Commons on HMRC Landfill Tax Investigations

On 20th February Mr Kevan Jones (MP for North Durham) asked the following written question of the Chancellor of the Exchequer: "How many visits to landfill sites in the (a) UK and (b) North East HM Revenue and Customs has conducted to check landfill tax payments in the last 12 months?"

On 23rd February he received a written reply by Jane Ellison, Financial Secretary to the Treasury - who had commented back in November that:  "The Government fully supports the environmental argument for minimising waste and increasing more sustainable alternatives to landfill, such as recycling. Landfill Tax has been key in helping to achieve this."

Following that, her written reply to the question is as follows:  "HM Revenue and Customs (HMRC) takes a risk-based approach to tackling all non-compliance, including those relating to Landfill Tax fraud. This means that it does not routinely allocate compliance budgets for individual taxes, but instead responds flexibly with civil and criminal investigations based upon the risks involved.

"This work has also been supported by the waste sector taskforce, which has targeted businesses across the supply chain. In 2015-16, the taskforce investigated 250 businesses, with a further 179 businesses targeted in 2016-17 to date.

"HMRC also undertakes criminal investigations, and in September 2015 14 people were arrested as a result of a multi-agency operation into Landfill Tax fraud. This investigation is ongoing. To avoid jeopardising any investigations and/or sources of intelligence, HMRC does not disclose specific regional details.

"In October 2016, in its ‘Measuring Tax Gaps’ 2016 publication, HMRC estimated the Landfill Tax gap to be £150 million in 2014-15."

She also added:  "HMRC does not hold readily accessible information concerning the number of complaints received for non-payment of Landfill Tax."

The Landfill tax was introduced in 1996 by Conservative Secretary of State for the Environment, John Gummer, and was the first environmental tax for the UK.  The amount of tax levied is calculated according to the weight of the material disposed of and whether it is active or inactive waste.

  • Inactive waste covers most materials used in a building's fabric as well as earth excavated for foundations. Most forms of concrete, brick, glass, soil, clay and gravel are classified as inactive.
  • Active waste covers all other forms of waste such as wood, ductwork, piping and plastics.

Inevitably there will be some mixing of waste such as inert bricks and concrete mixed with small amounts of wood or mineral dust packaged in polythene bags. It is for the producer of the waste to decide what is reasonable and acceptable in terms of active waste contamination of inert waste.

The landfill site operator is responsible for paying landfill tax. However, operators will pass the cost on to businesses and local councils on top of normal landfill fees. VAT is charged on the landfill fees and the landfill tax.

Operators can reduce their tax liability by making payments to the Landfill Communities Fund, which aids community or environmental projects in the vicinity of a landfill site. The fund is regulated by ENTRUST, a company limited by guarantee.