CLAUSE 114: LANDFILL TAX (STANDARD RATE)

INTRODUCTION

1. This clause increases the standard rate of landfill tax with effect from 1 April 1999.

DETAILS OF CLAUSE

2. Subsection (1) amends subsections (1)(a) and (2) of section 42 of the Finance Act 1996 so that references to £7 will change to £10. The effect of the amendment is to increase the standard rate of landfill tax to £10 per tonne.

3. Subsection (2) provides that the amendment will take effect from 1 April 1999.

BACKGROUND

4. Landfill tax applies to taxable waste disposed of in landfill sites licensed under environmental law. The main environmental objective of the tax is to encourage waste producers to consider more environmentally friendly alternatives to landfill. The standard rate of landfill tax is presently £7 per tonne for active waste.

5. The increase in the standard rate of tax to £10 per tonne supports the tax's environmental objectives as it is expected that the cost of landfill disposal will rise accordingly. The lower rate of tax on inert waste listed in a Treasury order remains frozen at £2 per tonne because it is already having significant effects on the landfilling of such waste.

6. The measure is effective from the 1 April 1999, following notice of the increase in the March 1998 Budget. Prior notice of the tax increase allowed producers to consider and implement alternative strategies for their waste.

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