HMRC collects record landfill tax

The HMRC has collected £1bn in extra revenue from investigations into underpaid landfill tax over the past five years, with £281m collected in 2023 alone, says law firm Pinsent Masons. 

Landfill tax is on waste disposed of in landfill and is designed to encourage waste reduction and recycling. However, Sam Wardleworth, Senior Associate at Pinsent Masons, says that it can be a difficult tax for businesses to report correctly, as parts of the regime are complex and difficult to apply in practice. A common cause of confusion for businesses is the fact that the categorisation and labelling of waste used by the Environment Agency and HMRC are different.

The interpretation of technical language describing waste materials means that in some instances innocent mistakes can be costly. Instances where industry jargon may be commonly used to describe a qualifying material can result in a rate of £102.10 per tonne as opposed to £3.25, despite the nature of the material being the same.

“If you’re disposing of ten thousand tons of waste, the wrong description can cost almost £1m in extra tax and fines. Unifying the environmental regime and landfill tax system is well overdue,” he said.

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