Select committee: Public Accounts Committee
Recommendation 16
Eighteenth Report - Government actions to combat waste crime
Published 19 Oct 2022
Addressed to HM Treasury
Public Accounts Committee Government actions to combat waste crime All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
HMRC estimates that the amount of landfill tax due but not collected was £200 million in 2019–20. The Environmental Services Association told us that proportionally this is the second highest tax gap across all taxes, which HMRC agreed with.56 We heard from HMRC that this lost revenue comprises tax avoided through waste operators misdescribing waste so as to pay the lower rate, and tax that should be paid on waste that is illegally dumped. HMRC agreed that the true tax gap is higher because, for example, this estimate does not take into account fly-tipped waste, which is also in some cases a crime committed to avoid landfill tax.57 HMRC told us that it aims to promote landfill tax compliance and deter crime through working closely with landfill site operators to identify and rectify non-compliance, primarily through civil sanctions.58 But HMRC finds criminal investigations complex, time-consuming and difficult, and has to balance the potential benefits against the impact on other aspects of its work. HMRC has not yet completed a single successful prosecution for landfill tax evasion, currently having only one underway, and it was frank that it is still learning how best to investigate such crimes.59
From: Public Accounts Committee, Eighteenth Report - Government actions to combat waste crime (HC 33), 19 October 2022
Government response
The government responded to the whole report on 14 December 2022 (deadline 19 December 2022).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government states that it agrees with the Committee's recommendations on waste crime, listing most as "implemented" and giving target dates for others.
- On the Resources and Waste Strategy, the government agrees with the recommendation, while noting that "some delivery has been slower than originally planned"; it lists planned reforms including digital waste tracking and reform of the waste carriers, brokers and dealers' regime, both "planned for 2024".
- On landfill tax, the government agrees and says the Landfill Tax Review would consider the structure of the tax and "the impacts of any proposed changes to this on waste crime"; HMRC is to report on its approach to investigations, with a target date of December 2022.
- On sanctions, the government agrees and notes that the Sentencing Council is responsible for sentencing guidance and the courts make "independent decisions"; the department "intends to conduct new research" into enforcement of small scale fly-tipping, "anticipated to commence in early 2023".
- On the digital waste tracking contract, the government agrees; it is "anticipated that the contract will be let by the end of 2022" and the department "will write to inform the Committee" when this happens.