HMRC: Landfill Tax Rules Updated in New Excise Notice LFT1

• HMRC has issued an updated Excise Notice LFT1, providing a comprehensive guide to Landfill Tax rules and obligations.
• The notice includes new Landfill Tax rates for 2026 and 2027, alongside updates for previous years.
• The temporary change to loss on ignition retesting conditions, introduced during the pandemic, has now been made permanent.
• Taxpayers can now approve Landfill Tax payments via online bank accounts, and the ENTRUST address has been revised.
• Legislative changes from 2018 are reflected, including clarification on taxable disposals and a new section on unauthorised waste sites.

A significant change in Section 6.9 makes the temporary adjustment to loss on ignition retesting conditions, initially introduced due to the coronavirus pandemic, a permanent feature.

HM Revenue and Customs (HMRC) has released a comprehensive update to its Excise Notice LFT1, which serves as a general guide detailing Landfill Tax rules and obligations. This revised notice incorporates a range of adjustments, including new tax rates, procedural modifications, and legislative clarifications, all designed to ensure adherence to current requirements.

This latest iteration of Notice LFT1 supersedes and replaces several previous versions, specifically cancelling the February 2017, December 2015, March 2015, and July 2013 editions. The current notice became effective on 1 April 2015, and a dedicated section, paragraph 1.2, titled 'What has changed?', provides a detailed overview of all modifications introduced.

Significant updates have been made to the Landfill Tax rates, with Section 3.1 now reflecting the rates applicable from 1 April 2026. Furthermore, tables within Section 3 and Section 15.1.2 have been revised to include new entries for 1 April 2027, as well as for 1 April 2025, 2024, 2023, 2022, and 2021. The Maximum percentage credit table, located in Section 15.1.2, has also undergone revision.

A notable change in Section 6.9 concerns the loss on ignition retesting conditions. A temporary adjustment, initially implemented due to the coronavirus pandemic, has now been made permanent. This section previously addressed delays in prescribed retests caused by Covid-19. Additionally, Section 17.4 has been updated to inform taxpayers that Landfill Tax payments can now be approved directly through their online bank accounts. The address for ENTRUST has been updated in Section 15.1.3, and the contact address in the 'your comments or suggestions' section of the notice has also been revised. HMRC has also incorporated information regarding the new online returns service.

The updated notice reflects broader Landfill Tax legislation changes that came into effect on 1 April 2018. These changes include a clearer definition of what constitutes a taxable disposal. A new Section 24 has been introduced, specifically addressing the issue of unauthorised waste sites, providing guidance and rules related to such locations.

Further revisions to Section 24 clarify evidential considerations and update existing references within the document. Several sections, including 1.2, 3.1, 11.1, 15.1.2, and 24.3, have been updated following a recent Budget announcement. Other sections, such as 1.2, 2.5, 3.1, 5.3, and 15.1.2, have also received general updates to ensure accuracy and currency.

The Landfill Tax itself functions as a fiscal instrument applied to the disposal of various materials. Its core objective is to provide an economic incentive for reducing the overall volume of waste generated. By taxing landfill disposal, the legislation aims to encourage the adoption of more sustainable waste management alternatives, such as recycling, composting, and the recovery of materials, thereby diverting waste from landfills. This comprehensive update ensures that the guidance provided aligns with current legislative requirements and operational procedures, impacting all entities involved in waste disposal activities.

Lawyers and compliance officers advising clients on waste management, environmental compliance, or property transactions involving waste disposal must review the updated Excise Notice LFT1 to ensure adherence to the latest Landfill Tax rates, procedural requirements (e.g., payment methods, ENTRUST address), and revised conditions for loss on ignition retesting, particularly the now permanent change.

Source: Original reporting via GOV.UK