Scotland looks to clarify landfill tax rules

30th October 2012


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The Scottish government is asking how it could best improve the tax regime when it takes over responsibility for taxing waste to landfill in 2015

In a new consultation, the administration confirms that it does not envisage significantly changing the structure of landfill tax in April 2015, when its devolved powers are expanded to include the tax. Nonetheless, it is asking waste producers, local authorities and landfill operators how the existing UK system could be made simplier.

The consultation asks in particular whether the list of materials qualifying for the lower tax rate should be made more consistent and easy to understand, and if there are any materials that could, in the longer run, be charged at a different tax rate.

The devolved government makes it clear that it does not intend to reverse previous changes made to the legislation regulating qualifying materials, but says it is “interested in views on any further refinements that could be made to create greater clarity for the sector”.

Scottish ministers also ask if any changes should be made to the list of exempt materials. The consultation document suggests, for example, that exempting hazardous materials, such as asbestos, could potentially help to reduce the illegal dumping of such waste by reducing disposal costs.

While not planning to overhaul the landfill tax system, the government is proposing aligning it with the permitting regime by having the Scottish Environment Protection Agency (SEPA) administer the tax. Using SEPA will help to streamline processes and reduce the amount of administration associated with landfill tax, by enabling it to combine its tax collection duties with its existing permitting enforcement activities, according to the consultation.

“[Having SEPA administer the tax] will be an efficient and effective Scottish solution that builds on established competence and experience here,” said John Swinney, the Scottish finance secretary in launching the consultation.

“The Scottish government wants to take this opportunity to ensure that landfill tax, environmental protection legislation, regulation and compliance regimes are all aligned and working in the best interests of our environment and our economy.”

The devolved administration has included in the consultation core principles that future environmental taxation in Scotland should follow in future. These are that taxation should:

  • only be considered where they can demonstrably address or mitigate an environmental problem;
  • clearly signal to consumers and producers about the outcomes sought; and
  • not disadvantage Scottish companies.

The consultation, which closes on 15 January 2013, also outlines proposals for a Scottish replacement for the landfill tax communities fund, which would enable operators to contribute more than under the existing UK rules.

The Scottish government plans to introduce a new Landfill Tax Bill to the parliament next spring.

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