Source · Select Committees · Public Accounts Committee
Recommendation 15
15
Accepted
HM Revenue and Customs (HMRC) explained that landfill tax was introduced in 1996 to encourage...
Recommendation
HM Revenue and Customs (HMRC) explained that landfill tax was introduced in 1996 to encourage the public and organisations that generate or process waste to move away from using landfill to dispose of waste, and that revenue generation is not its primary purpose.52 The tax comprises a lower rate for waste that will not decompose and a higher rate for waste that will decompose and release greenhouse gases.53 From 2008 to 2014, the top rate of landfill tax increased significantly with annual above-inflation increases in the rate, while the lower rate barely increased.54 This had the environmentally beneficial effect of driving down the level of waste sent to landfill and increasing recycling – HMRC told us that there has been a 90% decrease in the amount of waste sent to landfill by local authorities. However, landfill tax also increases the incentives to dispose of waste illegally to avoid paying the tax.55
Government Response Summary
The government agrees to ensure the current review of landfill tax takes account of the incentives that the tax as currently designed creates to commit waste crime. They will consider the structure of the tax and the impacts of any proposed changes to this on waste crime and on businesses, local authorities and individuals. They will continue to focus on using a suite of wider measures to tackle this issue.
Government Response
Accepted
HM Government
Accepted
3a. PAC recommendation: Defra should work with HMT and HMRC to ensure the current review of landfill tax takes account of the incentives that the tax as currently designed creates to commit waste crime. 3.1 The government agrees with the Committee’s recommendation Recommendation implemented 3.2 The government recognises that waste crime is an important issue. 3.3 The government set out in the Landfill Tax Review Call for Evidence published in November 2021 that as part of the review the government would consider the structure of the tax and the impacts of any proposed changes to this on waste crime and on businesses, local authorities and individuals. 3.4 Alongside considering waste crime impacts during the review the government will continue to focus on using a suite of wider measures to tackle this issue. 3.5 The department continues to collaborate closely with HM Treasury and HMRC on the Landfill Tax Review.