The UK Government has released a Consultation on Reform of Landfill Tax in England and Northern Ireland. The consultation seeks views on ‘proposals aimed at supporting the Government’s ambition to transition to a more circular economy, simplifying the tax and reducing opportunities for error and non-compliance, and cracking down on waste crime’.
This article aims to cover the potential implications if the proposals were to be implemented in their current form.
The consultation has, quite rightly, sparked concern across the waste, construction and mineral industries. The goal of reducing waste crime is fundamental. However, the consultation reveals a real disconnect between the intention and the practical and commercial reality.
For waste operators, the mineral sector and developers, the proposed changes present a real threat to project viability. Quarry restoration projects, for instance, rely on supply of (typically) inert materials to fulfil restoration requirements conditioned through planning permissions. Without landfill tax exemptions and lower-rate tax, such restoration and subsequent habitat creation to satisfy BNG requirements may become unfeasible, meaning operators cannot meet their planning obligations. The risk is not just mineral restoration becoming undeliverable due to lack of material but also the potential for sites to reduce the amount of mineral extracted to avoid these restoration issues, thereby further impacting the supply of minerals.
Ongoing delays in permitting bring further issues as timelines for recovery and landfill projects can currently run from 18 months to three years. If the reforms are implemented as proposed, there is likely to be a stampede towards Deposit for Recovery, which could put further pressure on the EA’s resources and delay permitting even further and does nothing to prevent illegal waste activities. You could argue that current EA enforcement needs strengthening as a priority before landfill tax is reformed.
The potential economic impact of the landfill tax reform in its current form is eye-watering. The British Aggregates Association (BAA) calculates that if a single rate tax is introduced, this could add £8,000-£12,000 to the cost of building every new home. The wider impact of this is an additional complication to the Government’s target of delivering 1.5 million new homes over the next five years.
The consultation highlights that waste classified under 19 12 12 is frequently misdescribed to qualify for lower rate tax, prompting the Government to propose removing the Qualifying Fines Regime by 2027. Rather than penalising the whole sector, a more pointed solution would be beneficial, with a task force focusing on targeted regulation.
The industry is pushing for pragmatic solutions, including retaining quarry exemptions, reforming the environmental permitting regime and improved regulation targeting specific waste regimes and misclassification.
Stakeholder engagement is critical and responding to the consultation with your thoughts and experiences is key to being heard. Look out for campaigns to raise awareness, build industry support, and engage with the Government outside of the consultation. The British Aggregate Association is aiming, through an e-petition, to gather 100,000 signatures so that the debate will be heard in Parliament.
The message to the Government is clear. Tackle waste crime, simplify tax and improve circularity, but not at the expense of our hardworking industry. This consultation will close on 21st July 2025. Responses should be provided via https://www.smartsurvey.co.uk/s/consultation-on-reform-of-landfill-tax-in-england-and-northern-ireland or by email to LfTpolicy@hmtreasury-gov.uk
