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Landfill Tax applies to all waste disposed at a licensed landfill site (unless the waste is classed as exempt). Landfill Tax applies to England and Northern Ireland, and is collected by HM Revenue & Customs (HMRC). The primary legislation that establishes Landfill Tax is contained in sections 39 to 71 and schedule 5 of the Finance Act 1996. The operation of the tax is underpinned by several pieces of secondary legislation, outlined in section 1.4 of HMRC’s Excise Notice LFT1.

The tax is devolved to Scotland (where the Scottish Landfill Tax is in place) and Wales (where the Landfill Disposals Tax was introduced). However, certain provisions applicable in England and Northern Ireland also apply to landfill operators in Wales that were registered for Landfill Tax until 31 March 2018, and those that were registered in Scotland until 31 March 2015.

In their overview of landfill tax the Office for Budget Responsibility (OBR) noted that “the Scottish and Welsh Governments have both so far announced rates that match those set by the UK Government. These taxes are all similar in design and the ONS combines them when recording them in the National Accounts, so we have combined them in our latest forecast.” The OBR estimate that in 2022-23 landfill taxes will raise £0.66 billion. This represents 0.1 per cent of all tax receipts and is equivalent to £24 per household and 0.03 per cent of national income.


Landfill Tax is charged by weight. There are 2 rates. The rates of landfill tax are uprated annually – that is, increased in line with inflation.

For less polluting materials (included in the Landfill Tax (Qualifying Material) Order 2011, as amended) and for qualifying fines (“particles produced by a waste treatment process that involves an element of mechanical treatment”), a lower rate applies. This rate has been set at £3.15 per tonne since 1 April 2022.

For all other taxable material, the Landfill Tax rate has been set at £98.60 per tonne since 1 April 2022.

Unauthorised landfill sites

Unauthorised landfill sites (sites that allow for landfill disposal without the required authorisations) became liable for Landfill Tax since 2018. The Treasury said the objective was to deter non-compliance “by removing the tax advantage that incentivises this type of illegal activity.” When the measure was confirmed in the Autumn 2017 Budget, the report estimated that this would raise £30 million in 2018-19, and £44‑50 million a year in subsequent years.

The reduced rate does not apply to waste disposed of in unauthorised landfill sites.

On top of this, a penalty can also be charged, of the value of up to 100% of the tax due. HMRC adds that, in some cases, “it is appropriate for criminal action to be taken.” Schedule 5, part 4 of the Finance Act 1996 sets penalties on conviction.

Landfill tax and the tax gap

In recent years HMRC has produced estimates of the tax gap – the difference between tax that is actually collected and that which is “theoretically due” – the tax that should in theory be collected if compliance and mistakes did not happen.

In June 2022 HMRC published revised estimates, which put the tax gap at £32 billion for 2020-21, representing 5.1% of total tax liabilities. 

HMRC estimate that the tax gap for landfill tax is 17.1% for 2020-21 (equivalent to £125 million). The estimate has fallen over the last two years: from 29.2% in 2018-19 (equivalent to £275 million), to 23.0% in 2019-20 (equivalent to £200 million), to its present level.

Current review of the design of landfill tax

In Spring 2021 the Government announced it would review landfill tax to ensure it “continues to support the government’s ambitious environmental objectives.” In November 2021 HM Treasury launched a call for evidence to ask for views on the key design features of the tax.

The Treasury’s call for evidence had a short section on waste crime, which noted the change made to the application of landfill tax to waste deposited on unauthorised sites.

The paper went on to suggest that it may be that other policy instruments might have to be used to tackle the problem, saying that “tax is not always the most effective policy instrument to tackle a particular issue.” It added that since the creation of the Joint Unit for Waste Crime (JUWC) in January 2020, significant interventions and investigations had been made, which had resulted in more offenders being targeted more effectively.  

This consultation closed on 22 February 2022. To date no further details have been published.

The Public Accounts Committee’s Inquiry on Waste Crime

In September 2022 the Public Accounts Committee completed an inquiry on government actions to combat waste crime, and as part of this, looked at the issue of landfill tax non-compliance.

In its report the Committee noted that the tax gap for landfill tax was relatively high and discussed the factors driving it as well as the difficulties HMRC had had in prosecuting criminal activity in this area. The Committee also looked at the actions of the Environment Agency on tackling landfill tax fraud.

The Committee recommended that, “the Department for Food, Environment, and Rural Affairs (Defra) should work with HMT and HMRC to ensure the current review of landfill tax takes account of the incentives that the tax as currently designed creates to commit waste crime”, and that, “HMRC should report by the end of the year on how it has improved its approach to landfill tax prosecutions.” The Government agreed with both recommendations in its response in December 2022.

As well as the landfill tax legislation itself, there are also a number of other laws and policies aimed at making sure that waste is dealt with correctly.

Waste duty of care

Section 34(1) of the Environmental Protection Act 1990, as amended, provides for a “waste duty of care”. The aim of this is to ensure the safe management of waste, to protect human health and the environment. The duty of care is imposed on everyone involved in handling controlled waste (household, industrial and commercial waste), from the person who produces it to the person who finally disposes of it or recovers it.

This waste duty of care is accompanied by a Waste Duty of Care Code of Practice, published by the Government, last updated in November 2018. The code of practice gives a number of responsibilities to the “waste holder” (the term which includes waste producers – any person whose activities produce waste). Failure to comply with the duty of care is an offence subject to an unlimited fine on conviction.


Fly-tipping is the illegal disposal of household, industrial, commercial or other ‘controlled’ waste. The waste can be liquid or solid. There are legislative provisions and sanctions which apply to both people who fly-tip themselves and to those who breach the waste duty of care by not using properly registered waste carriers.

The Government consulted in January 2018 on introducing a fixed penalty notice (FPN) for householders who had allowed an authorised waste carrier to dispose of their waste. Any householder who had not checked that they were disposing of their waste with a registered waste carrier would be at risk of a waste duty of care offence.

Following this consultation process regulations were made in England and Wales.  This now means that

Householders have a duty of care to check that anyone they use to take away and dispose of their domestic waste is registered. A Fixed Penalty Notice (FPN) can be imposed on householders if this is not observed. In England, this is covered by the Environmental Protection (Miscellaneous Amendments) (England and Wales) Regulations 2018 (SI 1227), and in Wales by the Household Waste Duty of Care (Fixed Penalties) (Wales) Regulations 2019 (SI 331).

Penalties for fly-tipping are set out in the Environmental Protection Act 1990. There is currently no minimum fine set out in law for unlawfully depositing waste under Section 33 of the Environmental Protection Act. The government has said that sentencing in individual cases is a matter for the independent courts.F Furthermore, from July 2014, sentencing guidelines have been produced by the Sentencing Council for England and Wales.24F In addition, under the Proceeds of Crime Act 2002, as amended offenders can have assets frozen and confiscated. There are also a range of other possible penalties including fixed penalty notices and seizure of property (including vehicles and contents).

Waste crime

The UK Government’s Resources and Waste strategy defines waste crime as anything that intentionally breaks the law relating to the handling and disposal of waste. Waste crime can be motivated by landfill tax evasion and generally covers activities including illegal exports of waste, large scale fly tipping, illegal burning of waste, illegal operation of waste sites, non-compliance with the waste duty of care, misclassifying waste and falsifying records.

The true scale of waste crime is difficult to fully quantify. In October 2021 the Environment Agency, in its report National waste crime survey report 2021 – findings and analysis, estimated that 18% of all waste is illegally managed.

The impacts of waste crime are widespread, with adverse effects on individuals, businesses, public services, the environment and the economy. For example, illegal waste sites can pollute the environment through the release of noise, dust, surface or groundwater contamination or through unauthorised fires and burning. These sites are unlikely to treat the waste in compliance with environmental best practice. They divert waste from legitimate businesses, reducing their potential income streams, viability and competitive advantage. The cost of remediation of fly tipped waste falls to public services and/or private landowners. Tax revenue is lost if the waste would otherwise have been sent to landfill.

The Environment Agency’s report stated that waste crime costs the economy in England an estimated £1 billion per year. This represented a 55% increase since its last estimate made in 2015 of £604 million per year.

Government measures to tackle waste crime

In the government’s January 2018 25 Year Environment Plan it set ambition to eliminate waste crime and illegal waste sites over the lifetime of the Plan (by 2043). Furthermore, the government’s December 2018 Resources and Waste Strategy contained a chapter on waste crime which also set out ambition for a more strategic approach to waste crime.

In 2018, Defra commissioned and published an independent review of serious and organised crime in the waste sector. The final report set out a number of recommendations for a more strategic approach to serious and organised waste crime. This has led to the creation, for instance, of the Joint Unit for Waste Crime (JUWC) in January 2020.

Reports into the Government’s work on waste crime

In April 2022 the National Audit Office (NAO) published a report, Investigation into government’s actions to combat waste crime in England. The NAO concluded that the Environment Agency does not have the data it needs to identify and assess the full extent of all waste crime, which makes it difficult to prioritise its response effectively. It also stated that landfill tax changes have led to a reduction in landfill volumes but have also increased the financial incentives to commit waste crime.

Following this work, the House of Commons Committee of Public Accounts published a report in October 2022, Government actions to combat waste crime. In relation to landfill tax evasion specifically it highlighted that HMRC had, to date, only pursued prosecution in one case of landfill tax evasion, which, “failed at a cost of £3.5 million.” It concluded that the current system did not provide sufficient detection and penalties to deter criminals in the sector.

The Government responded to the Committee’s report in a December 2022 Treasury Minute (opens PDF). In it, Defra said that it was taking forward the commitments in its Resources and Waste Strategy as a priority, but acknowledged that some delivery of it had been slower than originally planned. It said that waste crime was an important issue and said that as part of the Landfill Tax Review Call for Evidence (published in November 2021), the government would consider the structure of the tax and the impacts of any proposed changes to this on waste crime and on businesses, local authorities and individuals.

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