Source · Select Committees · Public Accounts Committee
Recommendation 33
33
HMRC expressed the opinion that Landfill Tax “needs to be complemented by regulation and effective...
Conclusion
HMRC expressed the opinion that Landfill Tax “needs to be complemented by regulation and effective enforcement of that regulation” to deal with the negative 58 Q 74; C&AG’s Report, para 1.33 59 C&AG’s Report, para 3 60 C&AG, Reducing carbon emissions from cars, Session 2019–2021, HC 1204, 26 February 2021, para 2 61 C&AG’s Report, para 2.14, Figure 14 62 Q 14 63 Qq 21, 54 64 Serious and organised waste crime review, Independent review into serious and organised crime in the waste sector, November 2018, page 1 65 C&AG’s Report, para 13 16 Environmental tax measures behaviours incentivised by the tax.66 When we asked HMRC about both exports of waste and fly-tipping, it told us that other departments had lead responsibility for these areas.67 We asked HMRC with whom it had engaged on the impact of Landfill Tax. It said that it was in contact with a range of different departments and in particular it worked with the Environment Agency. It gave the example of how it had worked with the Environment Agency to react to the increasing use of unauthorised landfill sites that HMRC said had been seen around four or so years ago. HMRC said this joint work had resulted in a legislative change which from 2018 had brought unauthorised sites into the scope of tax. HMRC also referred to the new joint unit on waste crime that has been set up to work in partnership with organisations such as the National Crime Agency to deal with criminal gangs.68 This unit was established in 2020 in the Environment Agency, in partnership with HMRC, the National Crime Agency and others, and was in response to a recommendation by the independent review into serious and organised crime in the waste sector in 2018.69
Government Response
Not Addressed
HM Government
Not Addressed
6: PAC conclusion: We were concerned that HM Treasury and HMRC seemed to view the consequences of environmental taxes as the responsibility of other government departments. 6: PAC recommendation: The exchequer departments need to: - consider and describe the expected impact of taxes on other departments’ responsibilities for environmental objectives, for example within tax impact and information notes; and - by autumn 2021, agree with other departments robust approaches for assessing and monitoring the effect of tax measures on government’s environmental goals. 6.1 The government disagrees with the Committee’s recommendation. 6.2 The government recognises that it is important to consider the impacts of taxes on environmental objectives and for HMRC and HM Treasury work closely with other departments to assess and monitor the impact of taxes. However, the Committee's recommendation could constrain the ability of Treasury Ministers to make decisions on the content of publications relating to tax policy in future Budgets. HM Treasury and HMRC already engage other government departments where it is appropriate in considering, formulating and managing policy, including tax policy that relates to environmental objectives, and will continue to do so. Whilst doing so the Exchequer departments have to take in to account the proportionality and practicality of further detailing of assessment and monitoring. 6.3 A recent example of such engagement is the Plastic Packaging Tax, in that it has been developed in tandem with wider waste policy reforms led by the Department for Environment, Food and Rural Affairs (DEFRA) and was decided on after considering a wide range of ideas to tackle plastic waste. Work also included cross departmental engagement between HM Treasury, HMRC and DEFRA to consider design issues with the new tax and interaction with planned DEFRA reforms and coordinating of consultations in 2019 on the high level design of the tax and waste reforms. 6.4 When considering the extent of this collaboration, HM Treasury and HMRC also have bear in mind the political and market sensitivity of tax decisions which are typically made and announced in Budgets to ensure coherency across the tax system. 6.5 The government will carefully consider next steps for options on internal assessment and publication of environmental impacts, taking into consideration the relevancy of environmental impacts to the tax measure and proportionality of which taxes to focus on to ensure value for money for the taxpayer. This will be kept under review in future Budgets. 6.6 Decisions on the publication of information are a matter for Ministers.