National statistics

Landfill Tax background and references

Updated 10 June 2021

As a result of the recent consultation on the reduction and consolidation of HMRC statistics publications, the Landfill Tax (LFT) Bulletin will be published within the ‘Environmental Taxes Bulletin’ annually from 30 June 2021.

1. Overview

Landfill Tax (LFT) is a tax paid by landfill operators on the disposal of material at a landfill site. The tax is passed onto businesses and local authorities through the gate fee for disposing of waste at a landfill.

The tax aims to incentives the diversion of waste from landfill to other less harmful methods of waste management such as recycling and incineration.

Landfill Tax currently only applies in England and Northern Ireland, having been devolved to Scotland and Wales - see below for further details.

Landfill tax applies to all material disposed of by way of landfill, either at an authorised site (from 1 October 1996), or at any site whether authorised or unauthorised (from 1 April 2018), unless the material is specifically exempt. This also applies to unauthorised disposals made prior to 1 April 2018, which are still on site on 1 April 2018.

The tax is charged by weight and there are two rates. At authorised landfill sites, inert or inactive waste is subject to the lower rate, and more polluting waste is subject to the higher rate. ‘Current and historic LFT Rates’ are included alongside this bulletin. Material disposed at unauthorised sites are charged at the standard waste.

Exemptions exist for:

1. dredgings
2. mining and quarrying waste
3. pet cemeteries
4. filling of quarries and
5. waste from visiting forces.

Click here for more detailed information on LFT.

2. Statistical Background

2.1 Landfill Tax in Scotland and Wales

Figures for financial year ending 2016 onwards are not directly comparable with previous years due to the devolution of the tax in Scotland and Wales. From April 2015, Scottish Landfill Tax is being administered by Revenue Scotland and receipts/declarations are no longer included in the HMRC figures.

Similarly from April 2018, Welsh Revenue Authority have administered Landfill Disposals Tax. Information for these taxes are available on the Revenue Scotland and Welsh Revenue Authority websites.

2.2 Sites without a permit

From 1 April 2018 the scope of Landfill Tax in England and Northern Ireland was extended to sites operating without the appropriate environmental disposal permit and changes were introduced to bring clarity to what material is taxable at sites that do have a permit.

At sites without a permit, the person disposing of the waste and anyone who knowingly facilitates the disposal may be liable for the tax. At sites with a permit, all material disposed of will be taxable unless expressly excluded.

2.3 Geographical breakdown and sector information

These statistics do not include any geographical breakdown on where tax liability arose as HMRC does not collect this data on the tax return. However, HMRC has published statistics showing an estimate of receipts at a country level.

The Office for National Statistics has also published statistics at country and regional levels as part of the ‘Country and regional public sector finances’, although this is on an accruals basis so will not align exactly with the ‘Landfill Tax bulletin’.

HMRC does not collect sector information for LFT as this information is not included on the LFT return.

2.4 Data sources

The data source for ‘waste tonnage’, ‘credit claimed’ and ‘net tax declared’ statistics is the tax returns from the registered LFT taxpayers (form ‘LT 100’). These statistics are reported according to the last month of the taxpayers’ accounting/liability period.

Most LFT taxpayers submit returns quarterly and the return is due to be received by HMRC before the end of the following month (for example, ‘net tax declared’ statistics for March 2011 refer to all returns that ended in March 2011; the accounting period for these returns is generally the quarter from January 2011 to March 2011 and the returns are due to be received by HMRC by the 30 April 2011).

The ‘waste tonnage’, ‘credit claimed’ and ‘net tax declared’ statistics are revised whenever amendments are made to returns or when late returns are received. For this reason the first three months of publication are provisional and may be updated based on incomplete or unfinalised return data.

‘Net tax declared’ is the tax payable on standard and lower rate waste tonnages minus any credits and reliefs claimed.

2.5 Credits claimed in respect of contributions to environmental bodies

Credits claimed in respect of contributions to environmental bodies are credits claimed on monies which have been donated under the Landfill Communities Fund (LCF). The LCF enables landfill operators to support environmental projects.

The maximum credit that landfill site operators may claim against their annual Landfill Tax liability for contributions to enrolled environmental bodies under the LCF is 5.3 per cent with effect from 1 April 2017. More information about LCF can be found on the ENTRUST website.

2.6 Total cash receipts

The data source for the ‘total cash receipts’ statistics is HMRC’s bank accounts. ‘total cash receipts’ is based on the cleared cash receipts in HMRC’s bank accounts received during the month relating to LFT (for example, ‘total cash receipts’ statistics for March 2011 refer to cash received in HMRC’s bank accounts during the month of March 2011).

‘Total cash receipts’ may be negative where repayments made to taxpayers exceed payments. From January 2017 onwards the data source for ‘total cash receipts’ is HMRC’s accounting system.

The ‘total cash receipts’ statistics are generally not revised as cash received during the month is known with a high degree of certainty by the end of the month.

One exception to this is that at the end of each financial year the ‘total cash receipts’ statistics are aligned with HMRC’s Trust Statement with the March figure adjusted if there is any difference. Where adjustments have been made these are usually small.

3. Statistical Quality

HMRC’s statement on statistical quality is published in ‘HMRC: Official Statistics’.

These statistics are based on administrative data sources. These statistics undergo a thorough internal quality-assurance procedure before publication. The ‘total cash receipts’ statistics are aligned with HMRC’s Trust Statement, which is audited by the National Audit Office.

The quality of these statistics depends on the purpose that they are intended to be used for. For understanding tax liable and paid for LFT these statistics are of high-quality as they are based on the returns and payments of all registered taxpayers. However for other purposes the statistics may not be the most appropriate as the scope of the statistics is defined by tax laws.

These statistics differ from the ‘waste management’ statistics published by the Environment Agency and the ‘waste and recycling’ statistics published by DEFRA. Both coverage and definition of waste may vary; the categories used in the LFT bulletin are defined in the guidance on the HMRC website.

4. Related Statistics

National statistics for cash receipts for all HMRC administered taxes are published in ‘HM Revenue and Customs receipts’ on the HMRC website.

The Environmental Taxes Factsheet has been discontinued as a result of the Indirect Taxes User Consultation Exercise. Archived copies are still available on the UK Trade Info website.

Statistics on the number of LFT registered taxpayers can be found in Numbers of taxpayers and registered traders.

HMRC does not publish a Tax Gap for LFT. Official statistics on tax gaps are published in ‘Measuring tax gaps’.

The estimated costs of tax expenditures and structural reliefs, and the illustrative effects of tax changes are published in ‘Tax expenditures and ready reckoners’.

For LFT there is an estimate for exemption for dredging waste and pet cemeteries.

The Office for National Statistics and HM Treasury publish ‘Public sector finances’, which covers tax receipts from all taxes on the ONS website. This does not separate out LFT receipts.

LFT receipts are forecast by the independent Office for Budget Responsibility (OBR) and published on the OBR website.

5. Rounding Policy

Tonnages are rounded to the nearest thousand tonnes. Credit claimed and net tax declared has been rounded to the nearest 0.1 million pounds. Cash receipts have been rounded to the nearest million pounds.

Any apparent discrepancy between totals and the sum of the constituents in the bulletin is due to rounding. Percentage changes are based on unrounded figures so will differ from percentages calculated using figures published in this bulletin.

6. Contacts

The Landfill Tax Bulletin is produced by the Indirect Tax Receipts Monitoring team as part of the ‘Excise duties, VAT and other tax statistics’ collection.

For statistical enquiries, contact:

S Taylor revenuemonitoring@hmrc.gov.uk

HMRC
Knowledge, Analysis and Intelligence (KAI)
Floor 2 Annex
Albert Bridge House
Manchester
M60 9AF

For media enquiries see HMRC press office.

For taxpayers with excise enquiries see the Excise Helpline.