H.M. TREASURY

CUSTOMS AND EXCISE

FINANCE BILL 2000
RESOLUTION 62	CLAUSE 136

CLAUSE 136: RATE OF LANDFILL TAX

SUMMARY

1.This clause increases the standard rate of landfill tax from £10 per tonne to £11 per tonne. The change takes effect from 1 April 2000.

DETAILS OF THE CLAUSE

2.Subsection (1) amends sections 42(1)(a) and (2) of the Finance Act 1996 to increase from £10 per tonne to £11 per tonne the tax payable on taxable disposals.

3.Subsection (2) provides for the new rate to come into force on 1 April 2000.

BACKGROUND

4.This increase in the standard rate of landfill tax from £10 per tonne to £11 per tonne from 1 April this year, and a programme of annually increasing the standard rate of landfill tax by £1 each year until 2004, when it will reach £15 per tonne, was announced in the Budget last year. The standard rate applies to active waste, that is waste that may degrade, giving off greenhouse gases, or leach into our water resources.

5.The aim is to encourage waste producers and waste management companies to switch away from landfill towards waste minimisation, re-use and recycling.

6.The lower rate of £2 per tonne, that applies to inert waste, is not being changed. This rate has proved to be sufficient to encourage the re-use of that category of waste, so that there is no need to increase the rate.

7.The increase will take effect for disposals made, or treated as made, on or after 1 April 2000. An example of a disposal being treated as made at a date after the date of disposal is where a landfill invoice is issued. The date of issue of that invoice establishes the tax point, unless there has been an election not to use the invoice date.

CUSTOMS AND EXCISE

CLAUSE 136

8.The expected revenue yield from the increase in the standard rate is +£30 million on a non- indexed basis. This is somewhat lower than anticipated this time last year and reflects revised economic and behavioural assumptions. There is no impact on the RPI.