Taking Forward a Scottish

Landfill Tax

Update on Secondary Legislation

Introduction

• Policy background

• Consultation

• Key differences with the UK tax

• Important developments since the summer

• Questions

Environmental Tax

• In 1996 Scotland landfilled approx. 94% of waste

• In 2013 Scotland landfilled 53% of waste

• In 2025 target of no more than 5% to landfill

• Policy initiatives:

o Zero Waste Plan

o Waste (Scotland) Regulations 2012

o Move Towards Circular Economy

Environmental Tax

Policy

• Build on a well established tax

• Build in flexibility

• Similar tax structure but refine

administrative arrangements for Scotland

• Retain a tax credit scheme

• Bring illegal dumping into the scope of the

tax

Secondary Legislation

• ‘Scottish Landfill Tax – A Consultation on Subordinate Legislation’ was published in June 2014 and sought views on a range of issues covered in draft secondary legislation

• The consultation closed on 31 July – 48 responses received

• An analysis of responses can be found on the Zero Waste Scotland website at www.scotland.gov.uk/Resource/0045/00450678

Primary Legislation

• Landfill Tax (Scotland) Act 2014 received Royal Assent in

January

• Revenue Scotland Tax Powers Act 2014 received Royal

Assent in September

Proposals in the Consultation

• Qualifying Material Order remained similar

• Prescribed Activities order remained

similar

• Exemption for Site Restoration – LA/SEPA

(especially for illegal sites)

• Weighing Waste

• Communities Fund

• Accounting and Invoicing Periods

Engagement Work over the Summer

• Waste Sector Workshop

• Communities Fund Workshop

• Devolved Tax Collaborative

• SESA Executive Group Meeting

• Working Group Meetings (cross section of

internal and external stakeholders)

• COSLA Meeting

Rates

• Scottish Landfill Tax rates will mirror UK Landfill

Tax rates at introduction

• Standard rate £82.60 a tonne

• Lower rate £2.60 a tonne

• Provisions in the Landfill Tax (Scotland) Act

2014 to create additional bands

Qualifying Materials Order

• In order to maintain stability and consistency for

industry, the Scottish Government has set the

same list of qualifying material that applies to UK

Landfill Tax

• Removed the single cell duty for ash and fly ash

• Scottish Government will introduce a loss on

ignition test

Loss on Ignition Testing • We intend on adding an extra group to the Qualifying Materials

Order for waste fines produced through waste screening/trommel processes

• A condition for the ‘fines’ material to qualify would be that the amount of combustible (therefore more active) material should be below a certain percentage (the threshold)

• The acceptable threshold has still to be established, including the ignition temperature. A sample will be taken at a set frequency and interval rate (to be set) to ensure that material qualifies

• The Scottish Government will conduct further work with SEPA and liaise with HMRC in establishing a standardised test across the industry

Loss on Ignition Testing

• In the first year of the tax, to qualify there will be two options for landfill operators:

o Use the condition in the Qualifying Materials Order for testing waste fines through

loss on ignition testing and;

o For loads or consignments of materials the lower rate will apply only where the

fines that come out of the trommel/automated process constitute those materials

or a mix of those materials included within the Qualifying Materials Order

o Landfill site operators will be required to keep sufficient evidence to substantiate

applying the lower rate of tax to a disposal of waste. In addition to the

descriptions contained in the Waste Transfer Notes, other paperwork will be

acceptable, including information from waste producers to enable landfill site

operators demonstrate that the disposal of waste is of qualifying material

• From 1 April 2016 loss on ignition testing will be obligatory for landfill site operators

when establishing whether waste fines qualify for the lower rate

Qualifying Material Criteria

• Non-hazardous

Wastes which are not 'hazardous' within the meaning of article 3.2 of the revised Waste Framework Directive

(2008/98/EC), unless the material has no practical alternative waste management option

and must be disposed of to landfill

• Low potential for greenhouse gas emissions Wastes which are not biodegradable, have a low organic content or do not break down under the anaerobic

conditions that prevail in landfill sites to produce methane. These include inert waste within meaning of article 2(e)

of the Landfill Directive (1999/31/EC); and waste with little or no organic content such as inorganic residues or

completely combusted residues from the incineration of biodegradable/organic wastes

• Low polluting potential in the landfill environment Waste where the contaminants are unlikely to become mobile in the landfill and any leachate produced has little or

no pollution potential. Where the pollution potential of the waste is reduced if deposited alone in mono-fill landfill

sites or within separate cells (not mixed with other wastes) within a landfill site. The engineering requirements for

the landfill are lower that would be the case for a non-hazardous landfill (as laid out in the Landfill Directive) by

virtue of a risk assessment agreed with the regulator. The aftercare period and requirements are significantly

lower than would normally be required for a non-hazardous waste landfill, based on a risk assessment agreed with

the regulator

Illegal Dumping

Landfill Tax is liable to anyone that deposits material to land by way of waste regardless of whether they have an authorisation or not

Applies to paragraph 9 and 19 exemptions when agreed tonnages are exceeded

Section 11 Order

• Amending primary legislation

• Exemption for site restoration – LA/SEPA

(through restoring sites of illegal disposals

or cases of insolvency)

Accounting Periods

• Accounting periods will be every financial quarter.

• Section 26 of the Act has been removed aligning tax

return periods with PPC return periods.

• The filling date has increased to 44 days from end of

financial quarter.

Weighing Waste

• Where an operator has a weighbridge, no

other method for calculating weight of

waste is permissible

• Penalties

• A water discount will be introduced

Communities Fund

• The Cabinet Secretary announced in the

budget that the credit rate for landfill

operators contributing towards the Scottish

Landfill Communities Fund will be 10%

higher than the UK rate for the first three

years of the Scottish Tax.

• Has set a provisional rate of 5.6% for the

first year.

Communities Fund Tax Credit

• Keep best part of existing system

• Keep fund’s ‘private’ status for match funding purposes.

• Revenue Scotland delegate regulatory powers to SEPA but maintain overall responsibility of the scheme

Communities Fund Tax Credit

• 10 mile radius extended to transfer stations

• The Distributing Environmental Bodies will distribute funds on behalf of landfill operators

• Landfill Operators no longer able to go directly to project with funds

Environmental Bodies

PROJECTS DISTRIBUTION

BODIES

Register with the SEPA Enrol with the

Distribution Body

Communities Fund

Landfill Operator Reporting

Objectives

• Remediation or restoration of land

• Community based prevention, recycling and

reuse projects

• Provide or improve a general amenity

• Protect or enhance a species or it’s environment

where it naturally occurs

• Restoration of historic structures or sites of

archaeological interest, including their landscape

context

Timetable

Landfill Tax

Questions/Discussion