Finance Act 2009 Explanatory Notes

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.

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