The Landfill Tax was introduced in 1996 by the Treasury as an environmental tax to help reduce the amount of waste going to landfill. At the time, there was a claim that it would not lead to an increase in costs for industry as NI was reduced at the same time, but it has since become disconnected from that argument and has steadily risen as an incentive to try to reduce landfill and encourage recycling.
The Tax is split into two bands. A lower band is applied to inert waste that contains no biodegradable material, whilst all other general waste has the standard band applied.
The table shows the two rates of tax up to 2010
| Date of change | Standard rate £/t | Lower rate £/t |
|---|---|---|
| 1/10/1996 | 7 | 2 |
| 1/4/1999 | 10 | 2 |
| 1/4/2000 | 11 | 2 |
| 1/4/2001 | 12 | 2 |
| 1/4/2002 | 13 | 2 |
| 1/4/2003 | 14 | 2 |
| 1/4/2004 | 15 | 2 |
| 1/4/2005 | 18 | 2 |
| 1/4/2006 | 21 | 2 |
| 1/4/2007 | 24 | 2 |
| 1/4/2008 | 32 | 2.5 |
| 1/4/2009 | 40 | 2.5 |
| 1/4/2010 | 48 | 2.5 |
The landfill tax currently stands at £40 per tonne and was to be capped at £48 per tonne from this April 01st 2010. The Chancellor has now stated that the £8 per tonne escalator will continue through to 2013. This means that the total cost for landfill is likely to reach over £100.00 per tonne in the next three years. This being comprised of £72.00 per tonne in landfill tax alone plus landfill disposal costs and transport/pre-treatment costs.