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[[Category:Legislation & Policy]][[Category:Economics]] | [[Category:Legislation & Policy]][[Category:Economics]][[Category:Targets & Metrics]] | ||
The [[Landfill Tax]] in the UK is applied to wastes that go to [[Landfill]], which increases the overall cost of [[Landfill]]. | The [[Landfill Tax]] ([[LFT]]) in the UK is applied to wastes that go to [[Landfill]], which increases the overall cost of [[Landfill]]. | ||
== Overview == | == Overview == | ||
The [[Landfill Tax]] in the UK is applied to wastes that go to [[Landfill]], which increases the overall cost of [[Landfill]]. The tax is applied per tonne of waste, applied in addition to the [[Gate Fee|gate fee]] charged by the landfill operator, who is responsible for charging and collecting the tax from the disposer of the waste, and accounting for the tax and paying it to [[HMRC]]. In | The [[Landfill Tax]] in the UK is applied to wastes that go to [[Landfill]], which increases the overall cost of [[Landfill]]. The tax is applied per tonne of waste, applied in addition to the [[Gate Fee|gate fee]] charged by the landfill operator, who is responsible for charging and collecting the tax from the disposer of the waste, and accounting for the tax and paying it to [[HMRC]]. In 2020/21 the amount of Landfill Tax collected was £566 million which is 11.7% lower than the previous financial year <ref name='hmrcstat'>[https://www.gov.uk/government/statistics/environmental-taxes-bulletin/environmental-taxes-bulletin-commentary-june-2021#landfill-tax-receipts-and-declarations HMRC National Statistical Environmental Bulletin commentary (June 2021)]</ref> and VAT is charged on the [[Landfill]] [[Gate Fee|gate fee]] and the Landfill Tax. | ||
'''Extract from Environmental Bulletin (Figure 4: Total Landfill Tax Receipts by Financial Year, in £million)''' | |||
[[File:LFT Receipts.png|none|700px|Figure 4: Total LFT receipts by financial year, in £million - Environmental Bulletin]] | |||
In November 2021 [[wikipedia: HM Treasury|HM Treasury]] launched a review of the Landfill Tax<ref>https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1037307/LfT_review_CfE.pdf</ref>. | |||
== History == | == History == | ||
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The Landfill Tax started out at modest rates and annual increases, and was then increased by £8 per tonne from 2006 to 2014 before moving closer to inflationary increases thereafter, with the rate from 1st April 2019 announced at £91.35 for active and £2.90 for inactive waste and from 1st April 2020 £94.15 for active and £3.00 for inactive waste. | The Landfill Tax started out at modest rates and annual increases, and was then increased by £8 per tonne from 2006 to 2014 before moving closer to inflationary increases thereafter, with the rate from 1st April 2019 announced at £91.35 for active and £2.90 for inactive waste and from 1st April 2020 £94.15 for active and £3.00 for inactive waste. | ||
From 2015 the Scottish Landfill Tax<ref>[https://revenue.scot/scottish-landfill-tax Scottish Landfill Tax]</ref> came into force (at the same rates England and set for the same rate in 2019/20) and from April 2018 Wales <ref>[http://www.legislation.gov.uk/wsi/2018/131/made Landfill Disposals Tax (Wales)]</ref> set its own landfill tax known as the Landfill Disposal Tax (with a slightly higher rate for active waste 2019/20 of £91.70. | From 2015 the Scottish Landfill Tax<ref>[https://revenue.scot/scottish-landfill-tax Scottish Landfill Tax]</ref> came into force (at the same rates England and set for the same rate in 2019/20) and from April 2018 Wales <ref>[http://www.legislation.gov.uk/wsi/2018/131/made Landfill Disposals Tax (Wales)]</ref> set its own landfill tax known as the Landfill Disposal Tax (with a slightly higher rate for active waste 2019/20 of £91.70). For 2020/21 Wales, Scotland, Northern Ireland and England will be aligned. <ref>[https://www.letsrecycle.com/news/latest-news/uk-landfill-tax-rates-similar/ Letsrecycle Article]</ref><ref>[https://www.gov.uk/government/publications/excise-notice-lft1-a-general-guide-to-landfill-tax/excise-notice-lft1-a-general-guide-to-landfill-tax#two-rates-of-tax Excise Note LFT1 updated 9 April 2020]</ref> | ||
To put the rates into context the landfill [[Gate Fee|gate fee]]s in 2018 were stated as £14.00 to £28.00 <ref>Letsrecycle.com</ref> with the tax representing therefore up to 5 times the [[Gate Fee|gate fee]]. | To put the rates into context the landfill [[Gate Fee|gate fee]]s in 2018 were stated as £14.00 to £28.00 <ref>Letsrecycle.com</ref> with the tax representing therefore up to 5 times the [[Gate Fee|gate fee]]. | ||
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|- | |- | ||
| 01.04.20 || style='text-align:center;' |£94.15 || style='text-align:center;' |£3.00 | | 01.04.20 || style='text-align:center;' |£94.15 || style='text-align:center;' |£3.00 | ||
|- | |||
| 01.04.21 || style='text-align:center;' |£96.70 || style='text-align:center;' |£3.10 | |||
|- | |||
| 01.04.22 || style='text-align:center;' |£98.60 || style='text-align:center;' |£3.15 | |||
|- | |||
| 01.04.23 || style='text-align:center;' |£102.10 || style='text-align:center;' |£3.25 | |||
|- | |||
| 01.04.24 || style='text-align:center;' |£103.70 || style='text-align:center;' |£3.30 | |||
|- | |||
| 01.04.25 || style='text-align:center;' |£126.15 || style='text-align:center;' |£4.05 | |||
|} | |} | ||
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Landfill tonnage of active waste at standard rates has progressively dropped with the introduction and progressive increase in Landfill Tax, with inactive waste at lower rates remaining reasonably static <ref name='hmrcstat' />: | Landfill tonnage of active waste at standard rates has progressively dropped with the introduction and progressive increase in Landfill Tax, with inactive waste at lower rates remaining reasonably static <ref name='hmrcstat' />: | ||
'''Extract from Environmental Tax Bulletin (Figure 5: Total Landfill tonnage declared split by taxable tonnage, taxable tonnage of which relived and exempt tonnage by financial year, in millions of tonnes):''' | |||
[[File:Landfill Tonnage Over Time.png|none|700px|Landfill Tonnage Over Time]] | [[File:Landfill Tonnage Over Time.png|none|700px|Landfill Tonnage Over Time]] | ||
There is evidence to suggest that the impact of increased recycling as a result of the Landfill Tax has | There is evidence to suggest that the impact of increased recycling as a result of the Landfill Tax has 'flat-lined' since around 2014, although the rates of tax announced<ref>https://www.gov.uk/government/publications/landfill-tax-rates-for-2024-to-2025</ref> for 2025 represent an increase of 22% on rates in 2024<ref>Graph by [[Monksleigh]]</ref>: | ||
[[File:Picture1 lft and recycling.png|alt=Landfill Tax vs Recycling Rates|center|700px]] | |||
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== Landfill Tax Credit Scheme == | == Landfill Tax Credit Scheme == | ||