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A new Bill, expected to be laid before the National Assembly today, will introduce the second tax to be devolved to Wales – landfill disposals tax – in April 2018.

First published:
28 November 2016
Last updated:

This was published under the 2016 to 2021 administration of the Welsh Government

Landfill disposals tax, like the existing landfill tax which is currently collected in Wales and England, will be a tax on the disposal of waste to landfill. It will be payable by landfill site operators who pass these costs on to waste operators.

There are currently 25 landfill sites in Wales, operated by 20 landfill site operators.  In Wales, the Office for Budgetary Responsibility forecasts that landfill tax will generate £27m in 2018-19.

The Bill will provide a broadly consistent approach to the existing landfill tax to provide stability and reassurance to businesses and minimise the risk of waste tourism. But it will seek to improve the current regime by making the rules clearer and easier to understand and by addressing current areas of confusion and uncertainty.

Landfill tax has two rates – a lower rate for qualifying materials and a standard rate for all other material. Landfill disposals tax will also have these two tax rates but the Bill introduces a new third tax rate  for unauthorised disposals, which is expected to be higher than the standard rate. This will act as a financial deterrent to illegal waste activity and tackle a potential source of tax evasion.

Some of the revenue raised from landfill disposals tax will be allocated to the Landfill Disposals Tax Communities Scheme, which will be set up before April 2018 to replace the existing Landfill Communities Fund.

Funding will be distributed to projects which focus on biodiversity, waste minimisation efforts and other environmental enhancements. Further details about how the scheme will be developed will be published shortly.

An announcement about the rates for landfill disposals tax will be made closer to April 2018, taking into account economic conditions and priorities at the time. The tax will be collected and managed by the Welsh Revenue Authority working with Natural Resources Wales on the compliance and enforcement of the tax.

Finance Secretary Mark Drakeford said: 

“This is the third of three Bills to establish tax arrangements in Wales and is an important step towards the devolution of tax to Wales. For the first time in 800 years, we are developing and implementing a tax regime that is more directly suited to the needs of our country and our people.

“By replacing landfill tax with landfill disposals tax from April 2018, public services in Wales will continue to benefit from the revenues raised by this tax. Wales is at the forefront of waste policy and landfill tax is an important element of achieving our goal of a zero waste Wales.

“We have worked closely with stakeholders in developing this Bill. It is simple and clear to apply; reflects established practices; is up to date and relevant to Wales.”

The Bill is expected to be introduced to the National Assembly today and the Cabinet Secretary will make a Legislative Statement about the Bill during Plenary in the Senedd tomorrow.