Legislation introduced by the Finance Act 2018 and taking effect from 1 April 2018 extended the scope of landfill tax to include disposals at sites without
an environmental disposal permit, but which ought to have one. Changes were also introduced as to what constitutes a chargeable disposal for landfill tax purposes.

The changes are potentially far reaching, bringing clients within the scope of the charge to landfill tax if they allow their waste to be disposed of at an unauthorised site – even if they do not personally dispose of the waste. Likewise, hauliers, brokers and landowners are brought within the scope of the tax if they allow disposal of waste at an authorised site.

Nature of Landfill Tax

Unless it is specifically exempt or excepted, landfill tax applies to disposal of materials:

  • at a landfill site that is covered by a permit; and
  • from 1 April 2018, at an unauthorised waste site.

Landfill tax is charged by weight and there are two rates: a standard rate and a lower rate. The lower rate applies to inert or inactive waste, and the standard rate to waste not chargeable at the lower rate. From 1 April 2018, the lower rate of landfill tax is £2.80 per tonne and the standard rate is £88.95 per tonne.

Landfill tax was devolved to Scotland from 1 April 2015 and to Wales from 1 April 2018. This article explains the rules as they apply to landfill tax in England and Northern Ireland.

What Constitutes a Disposal?

For landfill tax purposes, a ‘disposal’ takes place where the material is placed:

  • on the surface of the land;
  • on a structure set on the surface of the land; or
  • under the surface of the land.

Land includes land covered by water which is above the low water mark of ordinary spring tides. It does not matter for the purposes of the tax whether the waste is placed in a container before disposal – it is still a disposal if the material is covered with earth or deposited in a cave or a mine.

Authorised Sites

An authorised site in England is one that is authorised under the Environmental Permitting (England and Wales) Regulations 2016 (SI 2016/1154). The regulations were amended in 2018. An unauthorised site is one that allows disposals that require authorisation, but which does not have authorisation.

Taxable Disposals

Material placed within a landfill cell is, subject to certain exceptions, liable to landfill tax. A landfill tax cell is where most the disposal activity occurs; this may be a geological feature, such as a disused mine, or it may be an engineered unit created on the landfill site. The impermeable layer is not part of the cell and does not constitute material placed within the cell. Material placed in the cell is excepted from the charge to landfill tax if:

  • it is used to create a permanent cap;
  • the material forms a layer which performs a drainage function located immediately above the impermeable layer at the base of the landfill site;
  • it is used to construct a pipe, pump or associated infrastructure within a landfill cell for the purposes of the extraction or control of surplus liquid or gas from or within the cell;
  • or it meets one of the conditions for exemption from landfill tax.

Excise Notice LFT1: a general guide to Landfill Tax (available on the Gov.uk website at www.gov.uk/ government/publications/excise-notice-lft1-a-general- guide-to-landfill-tax) sets out exemptions from landfill tax and landfill site activities that are subject to the tax. It should be noted that the exemptions only apply to disposals at an authorised site.

Liability to Pay Landfill Tax

The landfill site operator is liable to pay tax on a taxable disposal if they are the permit holder for the landfill site, or if they should have a permit for a site where material is disposed of.

They are also liable for the tax if they make or allow a disposal of material for which a permit should have been held.

The controller of the landfill site is liable for the tax if the permit holder has no direct involvement in operating the site. In this scenario, if the person who is named on the permit fails to pay the tax, the controller is jointly and severally liable for the debt. The controller of a landfill site is a person, other than the permit holder, who determined what material (if any) was disposed of at the site or at part of the site. However, a person acting solely as an agent or an employee is not a controller. The controller of a site must notify HMRC that they occupy that role, but do not need to register for landfill tax. The responsibility to register falls on the site operator.

Disposals at Unauthorised Sites

The scope of landfill tax was extended from 1 April 2018 to include disposals of material at unauthorised sites in England and Northern Ireland. The new rules also apply to disposals which were made before 1 April 2018, but which are still on the site on 1 April 2018.

Also from 1 April 2018, the disposal of prohibited items is also taxed as a disposal at an unauthorised site.

The new rules were introduced following consultation and the measures are intended to deter non-compliance by making the illegal disposal of waste less profitable, reinforcing the principle that ‘the polluter pays’.

An ‘unauthorised site’ is any site, or area of land, that should have authorisation from the Environment Agency (or, in the Northern Ireland, the Northern Ireland Environment Agency), but which does not. Authorisation is typically in the form of a permit or licence.

Liability for Tax on Disposal at Unauthorised Site

Liability for landfill tax on a disposal at an unauthorised site may fall on:

  • the person who makes the disposal; or
  • any person who knowingly causes or facilitates the disposal.

Those liable under the second bullet may include:

  • the waste broker or dealer involved in the disposal;
  • the waste haulier involved in the transport of the waste to the unauthorised site;
  • the landowner;
  • the waste producer; or
  • any company officer.

Consequently, the scope of the rules is wide and, without taking proper care, clients may unwittingly find themselves with a landfill tax liability.

Importance of Good Business Practice

To safeguard against suffering an unintended and unwanted landfill tax liability as a result of a disposal at an unauthorised site, good business practice and record keeping are essential. A person can show that they did not knowingly cause or permit a disposal at an unauthorised site if they take all reasonable steps to ensure that a disposal at an unauthorised site does not happen. In determining whether ‘all reasonable steps’ have been taken, HMRC will consider the criteria set out in the Defra Waste Duty of Care Code of Practice. The code is available on the Gov. uk website at www.gov.uk/government/publications/waste- duty-of-care-code-of-practice.

To this end, HMRC expect a person to:

  • make reasonable checks that the next waste holder is authorised to take the waste material;
  • ask the next waste holder where they are going to take the material, and obtain proof if possible;
  • provide an accurate description of the material when it is transferred to another person;
  • as a company director or partner, be directly engaged or responsible for decisions made regarding the disposals by that business;
  • as a landowner, ensure that any lease or rental agreements state clearly what the premises or land may or may not be used for;
  • as a corporate body, include risk management procedures within their company’s risk assessment to take steps to prevent the criminal facilitation of landfill tax evasion through their business.

Guidance as to who constitutes a company officer and when they may be liable for tax is contained in guide LFT1 (in section 24.6).

How HMRC decide who is responsible for the waste HMRC officers may visit the site to decide who is responsible for making disposals at an unauthorised site.

They will inspect records and consider if, and to what extent, landowners and others involved have a duty of care.

The responsible person will be taxed at the standard rate of landfill tax, and issued with a tax assessment to this effect. Alongside the assessment, HMRC will provide information:

  • identifying the land where the disposal was made;
  • indicating the date on which the disposal was made or deemed to have been made;
  • explaining why the person is being held liable to pay the tax; and
  • describing the methods used to calculate the tax.

A penalty may also be charged. In some instances criminal action may be taken.


The extension in the scope of landfill tax may trap the unwary. Clients need to be aware of the rules on disposals at unauthorised sites, and take steps to protect themselves from an unwanted charge. Good business practice is essential – clients need to take responsibility for the integrity of their waste disposal chain, have good procedures in place and keep records to show that they have taken reasonable care.

Further guidance on landfill tax on waste disposed of at unauthorised sites can be found on the Gov.uk website at www.gov.uk/guidance/landfill-tax-on-waste-disposed-of-at- unauthorised-sites.