The main aim of landfill tax, when it was introduced in 1996, was to make waste disposal to landfill less attractive and therefore reduce waste volumes while encouraging alternative, less polluting, means of disposal.
So successful has it been that in April last year the government extended its reach to include waste disposal at any site – including at unlicensed landfill sites where waste disposal is illegal.
Of course, there are already severe penalties for the illegal dumping of waste but by extending landfill tax to unauthorised waste sites, HMRC – in partnership with the Environment Agency (EA) in England or Natural Resources Wales – can now further charge and penalise those with a disregard to compliant waste management and the relevant codes of practice.
The legal definition of waste includes soil arising from excavations on construction sites and the EA has made it clear that it is specifically targeting construction sites where soil has been deposited without full compliance with the appropriate codes of practice or without a waste permitting exemption. Those construction sites will be referred to HMRC for landfill tax.
Waste can be deposited legally under an exemption from waste permitting following recovery and conversion to a non-waste product (for example under the WRAP protocol). Or it can be deposited under the correct application of the Definition of Waste code of practice (Dowcop) administered by CL:AIRE, an independent body that promotes sustainable remediation of contaminated land and groundwater.
Without such exemptions the dumping of waste, including soil arising from construction sites, is considered an illegal waste deposit. This even applies where an organisation is stockpiling excavated soil on site; in doing so it is essentially creating its own landfill by disposing of waste there to avoid the costs of disposal and landfill tax.
Hence if the EA or HMRC choose to audit an organisation, there must be relevant documentation and reports to validate that the correct procedures have been followed when disposing of or reusing waste material. Without this, the organisation could be penalised.
Anybody who is responsible for managing an earthworks or construction site – whether as an individual or on behalf of an organisation – is responsible for keeping waste to a minimum, storing it safely and securely as well as ensuring that any third-party waste carrier is registered and legal.
As long as all reasonable due diligence has been carried out, HMRC promises that “safeguards will be put in place to ensure that landowners and people in the waste supply chain who, in spite of carrying out all reasonable due diligence, were unknowingly involved in the illegal dumping won’t be assessed for any tax or penalties”.
Effective waste management is the first stage to ensuring compliance and most people are now familiar with the five stages of the waste hierarchy: prevention, reuse, recycling, other recovery and, finally, disposal.
Correct management, appropriate classification and paying the appropriate landfill tax on its disposal should be enough to ensure compliance with the law. But reusing any material, especially excavated material, without a suitable permit, exemption or materials management plan in place could land you in trouble.
There are two landfill tax rates: less polluting, or ‘inert’ material is currently taxed at £2.80 per tonne; all other waste, however, is taxed at £88.95 per tonne.
Clearly it pays to reuse or recycle material subject to the higher rate if at all possible. If it is directly suitable for reuse, then it may be reusable (on site or via transfer to another site) under the CL:AIRE code of practice, a WRAP protocol exemption or a U1 exemption, which applies specifically to the construction industry.
Under the U1 exemption, the operator is required to register the exemption with the EA, keep suitable records to demonstrate compliance and ensure the materials meet the requirements of the exemption. The volume limit for soil is 1,000 tonnes.
Under the CL:AIRE code of practice, operators must have legitimate reasons to reuse the material, which must be suitable for that reuse purpose. A materials management plan must be prepared to detail the whole process of assessment, tracking, reuse and verification and a verification report, prepared by a suitably qualified person, submitted to CL:AIRE. The EA may audit the site and landfill tax may be payable if there is no verification record.
The WRAP protocol outlines that waste should receive source approval testing, and follows an appropriate waste recovery process. Records must demonstrate the end of waste criteria was met.
If there is a reason that material cannot be directly reused – because of potential contamination or because it’s not required – the material can either be treated (under a suitable permit) to make it suitable, or classified and disposed of.
If you do not have a legitimate use for your material on site, there may still be other options instead of sending it to landfill. For example, an appropriately permitted fixed soil recycling centre might be able to treat it and ultimately find a suitable use for some or all of the material on a third-party site.
• Paul Tilley is operations director, environment & safety, with waste management consultant Socotec
This article was first published in the February 2019 issue of The Construction Index magazine