LAWR

WASTE HANDLING High hopes for new landfill regulations The Landfill Tax Loss on Ignition testing regime has finally kicked in. Now HMRC needs to be consistent and robust in its enforcement to help stamp out misclassification, says Sam Corp. t's been estimated that the Treasury loses around £160m a year due to the misclas- sification of waste. Given the differential between low rate (£2.60) and standard rate (£82.60) landfill tax, it's not surprising that problems have arisen. Indeed, since 1996 the lower rate has increased just 30%, whilst the higher rate has rock- eted 1080% thanks to the Landfill Tax Escalator. The law has always allowed the presence of a small or 'incidental' amount of 'standard rated' material to be present in a low rated load. However, the difficulty for landfill operators – who bear all the liability of paying the correct tax – is that up until now they had to rely on a visual test alone to determine whether the material was low rated or not. But, after almost three years of pressure, there is finally a new regime in place through the Landfill Tax Amendment Regulations 2015. These include the Loss on Ignition (LOI) I June 2015 Local Authority Waste & Recycling 23 Sam Corp is head of regulation at the Environmental Services Association. to qualify for the lower tax rate the fines must consist predominantly of qualifying material, with no more than an 'incidental amount' of any other non-qualifying material. The testing regime itself is fairly straightforward and low cost. It will involve both a pre-acceptance check by the landfill operator on the process producing the waste fines, as well as a sampling and testing aspect to effectively measure the level of 'contamination' in the waste fines. A representative waste sample must be taken from the waste fines as they arrive at the landfill site; this is then combusted in laboratory conditions to calculate how much non-inert material is present. The load must have an LOI of 15% or less in order to be considered eligible for the lower rate of tax. The LOI limit will drop to 10% on 1 April 2016 to give operators 12 months to make any necessary changes to their existing systems. The frequency of the LOI test will depend on a number of so-called 'risk factors' that the landfill operator must consider. The default minimum number is one LOI test for every 1,000 tonnes of waste received from an individual processor. However, the frequency could increase to testing every load where pre-acceptance checks and previous results indicate frequent exceedances or inconsistency. And the landfill operator will also have to keep a sample in reserve should the taxman decide to retest a sample. HMRC has been clear that deliberate blending of material to artificially reduce the LOI will render the fines liable to the standard rate and that shredding is likely to increase the risk that the fines contain more than an incidental amount of non-qualifying material. And every load that exceeds the LOI limit will be liable to the standard rate of landfill tax. It's a significant difference: for a typical 20-tonne truck the tax bill for a load that exceeds the LOI is £1,600 more than one that doesn't. The sector will need time to let the new regime bed in, but we hope HMRC will be both consistent and robust in its enforcement to ensure that the new requirements are properly implemented by all parties. The regime should provide more confidence, certainty and consistency to our sector and help to deal with an issue that has caused controversy for many years. " The new regime should provide more confidence, certainty and consistency " testing regime for waste 'fines' arising from mechanical treatment facilities. The new testing regime is a much more objective approach, and applies to all fines destined for landfill that have arisen from a 'waste treatment process that involves an element of mechanical treatment'. In the main, it will apply to fines which arise after material has been processed via trommelling equipment designed to remove recyclable material. In order Out of pocket. The misclassification of waste is thought to cost the Treasury £160m a year in lost landfill tax.

• Cover