On Friday, HMRC announced a fall in Landfill Tax receipts. This continues the downward trend seen over the last 10 years. The receipts, which up until 2015 was the largest environmental levy, have fallen by 6% in the 2022/23 financial year to £626 million. The tax was introduced in 1996 and aimed to ‘provide incentive for the diversion of waste from landfill to other less harmful methods of waste management’.
LFT is a tax paid by the operators of landfill sites on the disposal of materials. Since 2014, the taxes collected have ‘fallen substantially’ year on year, except for a slight rise after the COVID-19 pandemic. However, while the receipts have decreased, the tax rates have increased year-on-year, going from £72.00 per tonne in April 2013 to £102.10 per tonne in April 2023. Tolvik Consulting Director, Chris Jonas said:
The most recent HMRC published environmental taxes bulletin shows two bits of good news, a widely reported reduction in taxable inputs, and equally importantly for 2022 a provisional 15% increase in total cash receipts to £698m."
The aim of the tax is to shift behaviours and practices; instead, encouraging more sustainable ways of dealing with waste through reusing, recycling, and recovery. The benefits of decreasing the amount of landfill include minimising groundwater pollution, greenhouse gas emissions and habitat destruction. Previously, the data also showed that 22.35 million tonnes of landfill tax tonnage was declared in the financial year, which is a 2% drop year on year. If the downward trend continues, the UK has the potential to join countries such as the Netherlands, Denmark, and Germany, where landfill sites are almost non-existent.