Landfill Tax: scope and liability
Landfill Tax was introduced from 1 October 1996 by the Finance Act 1996 (FA 1996) as a charge on waste disposed of in landfill sites in the UK. It is payable in connection with waste disposed of at a licensed landfill site. The scope and key definitions were significantly amended by the Finance Act 2018. As a result, from 1 April 2018, it was extended to cover also disposal at unauthorised waste site.
It is important to note that Landfill Tax also covers prescribed landfill activities relating to use of material on site (for examples, see Footnote 1) , meaning that materials used operationally on site may still be treated as taxable disposals.
The tax is collected primarily from the landfill site operator and may extend to the controller of a landfill site in particular circumstances. For disposals at unauthorised sites, the person who makes the disposal or facilitates it will be jointly and severally liable.
Reform: what changed, and what did not
In November 2025, the HM Treasury published its response to its April 2025 consultation on reforming Landfill Tax in England and Northern Ireland alongside the Autumn Budget 2025. The consultation followed a call for evidence on reform in England and Northern Ireland in July 2025 which sought views on several changes including simplifying to a single rate of tax and removing discounts and exemptions.
In its response, the Government has decided not to take forward most of its consultation proposals. The government confirmed, it will NOT:
- merge the two rates of Landfill Tax (standard rate and lower rate) by 2030;
- remove the Qualifying Fines Regime from 2027;
- remove the exemption for quarries with disposal permits from 2027;
- remove the water discounting scheme; and
- increase the rate applied to disposals at unauthorised waste sites.
However, the Government will proceed with removing the exemption for stabilisers used in dredged material from April 2027. As the outcome retains the status quo for most the proposals, it also means that existing classification disputes and evidential challenges remain live issues.
Rate and qualifying materials
As part of the Autumn 2025 Budget, the Government announced that it would not be merging the standard and lower rates of Landfill Tax into a single rate. They will however be increasing the lower rate by the same amount in £ as the standard rate. This will see the lower rate increase more quickly than it has in the past. The Landfill Tax rates for 2026 to 2027 in England and Northern Ireland are as follows:
Rates from 1 April 2025
- Standard rated material sent to landfill: £126.15 per tonne
- Lower rated material sent to landill: £4.05 per tonne
Rates from 1 April 2026
- Standard rated material sent to landfill: £130.75 per tonne
- Lower rated material sent to landill: £8.65 per tonne
To benefit from the lower rate of tax, a disposal must be “qualifying material”, ”Qualifying Fines” or be a mixture with a ‘small’ (a term specifically defined in the Landfill Tax regime) amount of standard rated material. Disposal of this type are generally regarded as having a lower environmental impact, with reduced potential for greenhouse gas emissions and pollution. The standard rate applies to all other taxable wastes.
The tax is chargeable by weight. Materials must be disposed at an authorised waste site to enjoy the lower rate; the standard rate of tax applies to disposal at an unauthorised site.
It is possible to claim credit for material removed to another authorised landfill site, for recycling, incineration or re-use. This applies only to authorised landfill sites.
Enforcement and exposure
There are a range of civil penalties which HMRC can apply against contravention. Additionally, if you are found guilty of a criminal offence you may be subject to penalties:
- on summary conviction, a fine of up to the statutory maximum (£20,000) or of 3 times the amount of tax, whichever is the greatest and up to 6 months in prison
- on conviction on indictment, an unlimited fine or up to 7 years in prison, or both.
HMRC can charge Landfill Tax on disposals made at an unauthorised site. To determine whether such a disposal has occurred, HMRC will consider the nature of the material, the location of the deposit, and the manner in which it was deposited.
In its 2025 consultation paper, the Government has highlighted an increase in the involvement of serious and organised criminal gangs in the waste sector. Since its formation in 2020, the Joint Unit for Waste Crime (JUWC) has organised and/or attended 312 multi-agency days of action, which have resulted in 175 associated arrests by other agencies. In February 2024, the Environment Agency launched an Economic Crime Unit which targets the money and assets obtained from waste crime.
These developments underline the increasingly joined up approach between tax authorities, environmental regulators and law enforcement, and the heightened consequences of misclassification or non compliance.
Waste treatment before landfill: Singleton Birch / FCC Recycling
In the recent decision Singleton Birch Ltd & FCC Recycling (UK) Ltd v HMRC [2025] UKUT 72 (TCC), the appellants, Singleton Birch, were arguing that their waste should incur the lower rate within the statutory definition (which it met) despite it being treated with a non-qualifying material to make it more environmentally friendly and non-hazardous at disposal.
The appellants lost the case as the court found that waste in question did not meet the statutory description and therefore did not attract the lower rate of tax, despite the problematic material being added to improve the environmental impact of the disposal.
The decision is a clear reminder that, even where waste treatment delivers environmental benefits, reduced rate relief will only be available where the resulting material falls squarely within the statutory definition of qualifying material, which may be subject to HMRC challenge.
The Government’s November 2025 response was slightly more positive in this respect. Many of the responses to the consultation focused on the detrimental environmental impacts that might follow if the changes were incorporated, particularly in aggregate recycling and washing. In response to that feedback, the government did not incorporate the changes.
When ‘operational use’ is still disposal: Devon Waste
In the case Revenue and Customs Commissioners v Devon Waste Management Ltd [2021] EWCA Civ 584, while the concerned waste material was used in landfill sites as "fluff" and EVP to protect the lining membrane of landfill cells, it was found that the usage of the waste did not negate the intention to discard the material, it could co-exist to serve a double purpose. The court weighed up various factors to establish the intention.
The case demonstrates that using waste for an operational purpose does not, of itself, prevent a finding that the material has been discarded for landfill tax purposes.
Devolution: divergence risks ahead
Landfill Tax was devolved to Scotland in 2015 and to Wales in 2018. Both jurisdictions have to-date remained similar in design and structure to the tax in England and Northern Ireland.
However, at the Scottish Budget on 13 January 2026, the Scottish Government announced the commencement of commission independent research in 2026 to explore potential Scottish Landfill Tax reforms, including changes to rate structures. Additionally, as part of the evolving landscape, the Scottish Landfill Communities Fund is set to be closed to new contributions from 1 April 2026.
In Wales, it operates a distinctive enhanced unauthorised disposals rate at £196.15 per tonne (around 150% of standard). The Welsh Government has also consulted on changes to the lower rate and, more recently, on legislative proposals to clarify material used within a landfill cell and to amend the definition of landfill cell.
Businesses operating across jurisdictions should therefore monitor developments closely, as increased divergence may introduce additional complexity and compliance risk.
Footnote 1
Such activities include, for example:
- Temporary cover of the disposal area, while landfill disposal stops for the short term;
- Temporary haul roads;
- Temporary hard standing;
- Cell bunds;
- Temporary screening bund;
- Temporary storage of ash (including pulverised fuel ash and furnace bottom ash), and;
- Protecting the drainage layer of liner of the disposal area.
