Section 119 Schedule 60: Landfill Tax: Prescribed Landfill Site Activities
Summary
1.Section 119 provides for Schedule 60 which will enable HM Treasury to prescribe by order that a landfill site activity is subject to landfill tax, remove the power to make regulations to provide that landfill tax is not payable in respect of the temporary holding of material for certain purposes in designated areas and remove the exemption from landfill tax for site restoration. The Schedule will also provide that HM Revenue & Customs (HMRC) has access to information on the temporary holding of material at a landfill site and site restoration and enable the landfill tax return form to be prescribed in guidance rather than regulations.
Details of the Schedule
2.Paragraph 2 inserts a new section 65A into Finance Act (FA) 1996. The new section makes a number of provisions, including that:
HM Treasury may prescribe by order that an activity on a landfill site is subject to landfill tax;
an order may make any provision which HM Treasury thinks necessary or expedient in connection with the prescribing of landfill site activities;
an order may prescribe a landfill site activity by reference to conditions; and
an order may amend or otherwise modify part 3 of FA 1996 or any other enactment relating to landfill tax, apart from the rate at which landfill tax is charged.
3.Paragraph 3 inserts new subsections (7) (ca) and (cb) into section 71 of FA 1996 to provide that an order relating to the prescribing of landfill site activities, or an order amending part 3 of the FA 1996 or any other enactment relating to landfill tax, shall be laid before the House of Commons and, unless approved within 28 days, shall cease to have effect.
4.Paragraph 4 provides for the omission of section 62 of FA 1996 which confers the power to make regulations to provide that landfill tax is not payable in respect of the temporary holding of material for certain purposes in designated areas.
5.Paragraph 7 inserts a new paragraph 1A in Schedule 5 to FA 1996. It provides for Commissioners’ of HMRC regulations that may make provision about giving information about material on a landfill site (or part of a landfill site) to HMRC. Regulations may require, or authorise HMRC to require, the designation of part of a landfill site as an “information area”, that certain material is deposited in an information area and make provision about information relating to what is done with material.
6.Paragraph 9 inserts a new paragraph 2A in Schedule 5. It provides for regulations that may require the keeping of records relating to material at a landfill site (or part of a landfill site), including records about what is done with that material.
7.Paragraph 10 provides for the omission of section 43C of FA 1996 which provides for the exemption from landfill tax of material used for site restoration.
8.Paragraph 11 inserts a new paragraph 1B into part 1 of Schedule 5 of FA 1996. It provides that a landfill site operator must supply HMRC with certain information before commencing site restoration.
9.Paragraph 12 amends section 49 of FA 1996 so that the landfill tax return form shall be prescribed in such form as the Commissioners determine (and not necessarily by regulation).
10.Paragraph 13 provides that:
paragraph 10 (repeal of section 43C) comes into force on 1 September 2009;
paragraph 11 (information about site restoration) has effect in relation to the restoration of landfill sites commencing on or after 1 September 2009; and
regulations made under section 62 of FA 1996 (which is repealed by paragraph 4) and the repealed part of section 49 of FA 1996 (see paragraph 12) will remain in force until they are revoked. The power to revoke any such regulations by statutory instrument is retained.
Background Note
11.Landfill tax was introduced on 1 October 1996. It encourages waste producers and the waste management industry to switch to more sustainable alternatives to landfilling waste.
12.The provisions in Finance Act 2009 follow the judgment of the Court of Appeal in Commissioners for Her Majesty’s Revenue and Customs – v- Waste Recycling Group Limited [2008] EWCA Civ 849 (“the WRG case”). The judgment has significant implications for what is considered to be a taxable disposal of waste.
13.HM Treasury is taking powers to prescribe by order that an activity on a landfill site is subject to landfill tax in order to address the situation, in the light of the WRG case, that uses of waste on a landfill site are not taxable. The order will be published in draft during the Public Bill Committee stage.
14.Following the WRG case, it is clear that the temporary holding of waste on a landfill site for certain purposes and the use of material for site restoration are not, in any case, taxable. The current provisions in legislation, that tax is not payable in these situations, are therefore being removed as they are no longer necessary and their retention would create confusion.
15.In order to establish whether or not a taxable disposal of waste has taken place, HMRC will have a continued need for information about the temporary holding of waste at a landfill site and site restoration. Finance Act 2009 provides that HMRC will continue to have appropriate access to this information.
16.The Commissioners’ regulations provided for in the Schedule will be published in draft during Public Bill Committee.
17.The removal of the requirement that the landfill tax return form is prescribed in regulations is a matter of administrative convenience which will bring landfill tax in line with the other environmental taxes (aggregates levy and climate change levy).
18.The Schedule will come into effect on the date that Finance Act 2009 receives Royal Assent, save for paragraphs 10 and 11 which will come into effect on 1 September 2009. The associated secondary legislation provided for in the Schedule will come into effect on 1 September 2009.
