EXPLANATORY NOTE
(This note is not part of the Regulations)
The Landfill Disposals Tax (Wales) Act 2017 (“the 2017 Act”) establishes a new tax, to be known as landfill disposals tax. The tax is to be charged on taxable disposals, which are defined in Chapter 2 of Part 2 of the 2017 Act.
These Regulations make provision in connection with the administration of the tax.
Part 1 provides that the Regulations come into force on the day on which section 2 of the 2017 Act comes into force. This is the day on which the tax will begin to be charged on taxable disposals.
Part 2 makes provision about mixtures of materials that consist entirely of fines. Fines are particles produced by a waste treatment process that involves an element of mechanical treatment.
A mixture of materials that meets requirements 1 to 6 in section 16 of the 2017 Act is ordinarily treated as a qualifying mixture of materials to which the lower rate of landfill disposals tax applies. Where the mixture consists entirely of fines, however, the mixture must also meet the requirements in regulation 4 in order for the lower rate of tax to apply to a taxable disposal of the mixture. These requirements include a requirement relating to loss on ignition (LOI) testing.
Regulation 5 sets out general LOI testing requirements with which operators of authorised landfill sites must comply in order for mixtures of fines to be treated as qualifying mixtures of materials. Regulations 6 and 7 confer powers on the Welsh Revenue Authority (WRA) in relation to LOI testing, and regulations 8 to 11 make provision in connection with penalties that may be imposed on operators in relation to failures to comply with certain requirements under these Regulations.
Part 3 gives operators of authorised landfill sites an entitlement to a tax credit, known as customer insolvency credit, where a customer becomes insolvent before having paid the operator for carrying out a taxable disposal.
Regulation 14 sets out the requirements that must be met in order for the entitlement to arise. Regulation 18 sets out the manner in which the amount of the entitlement to credit is to be calculated. Regulations 19 and 20 specify the manner in which an amount of credit may be claimed and the manner in which credit may be given.
A person who makes a claim for credit must hold and preserve the evidence specified in regulation 22 and must also keep a customer insolvency credit record in accordance with regulation 23.
A person who has benefited from an amount of credit may be required to make payments to WRA in certain circumstances. Those circumstances are specified in regulations 24 and 25.
Regulations 26 and 27 and the Schedule to these Regulations make a number of amendments and modifications to the Landfill Disposals Tax (Wales) Act 2017 and the Tax Collection and Management (Wales) Act 2016 in connection with tax credits.
A regulatory impact assessment has been prepared as to the likely costs and benefits of complying with these Regulations. A copy of the assessment can be obtained from the Welsh Treasury, Welsh Government, Cathays Park, Cardiff, CF10 3NQ and is available on the Welsh Government website at www.gov.wales.