Changes Ahead for Charges on Waste

In April, the Government published a consultation on changing the way that the Landfill Tax system works in England and Northern Ireland.  Currently, there is two-rate system of charges, and the Government is consulting on moving to a single rate by 2030.   

The current rates as of 1st April 2025 are 

• Standard rate - £126.15 per tonne 

• Lower rate for inert wastes - £4.05 per tonne 

The History and Rationale for Change 

The Landfill Tax has been going a long time.  It was first introduced in 1996 to encourage the diversion of waste away from landfill and towards more environmentally friendly waste management options such as recycling, re-use and recovery.   The Tax is seen as a key driver of the 90% fall in waste to landfill reported by local authorities since 2000.  While a laudable reduction, the government wishes to drive even more waste away from landfill as part of the ambition to transition towards and harness the full potential of, a circular economy in which we will make more productive and efficient use of our resources and keep products in use for longer.   

In 1996 the Tax was designed with two rates – a lower rate for less polluting materials and a standard rate for all other materials. From the 2000s, a series of escalators were applied to the standard rate to encourage investment in more sustainable waste management, especially for biodegradable municipal waste, where the UK had targets to reduce the amount going to landfill. This led to the volume of standard rated waste falling from 24.8m tonnes a year in 2010/11 to 4.4 m tonnes in 2023/24. In the same period the volume of lower rated materials only fell from 11 m tonnes to around 8 m tonnes a year. 

Despite this success in reducing the amount going to landfill, there is nonetheless a continued need to drive progress towards the near elimination of bio-degradable waste going to landfill to meet the UK waste decarbonisation targets.  It is acknowledged that the price incentive of the tax does support this drive.   

However, it is also recognised that the application of the dual-rate structure and range of reliefs that have developed as part of the tax regime, can be open to misinterpretation, which has made Landfill Tax increasingly challenging for businesses to comply with and for HMRC to enforce.   The differential in rates has also led to some waste creators describing standard-rated waste as lower-rated to avoid the higher tax rates.  

The Proposals within the Consultation 

• move towards a single rate of Landfill Tax by 2030. This will be achieved by applying an escalator to the lower rate until it meets the standard rate in 2030. 

• mixed wastes will be charged at the standard rate, whilst the Government will outline exactly what will qualify for the lower rate of Landfill Tax; 

• the rate of Landfill Tax at unauthorised waste sites will rise to 200% of the standard rate from 2027; 

• the Landfill Tax exemption for materials disposed of on or in quarries with a disposal permit will be scrapped from 2027, bringing that waste in scope of the Landfill Tax; 

• materials used to fill quarries with a recovery permit will remain outside of the scope of Landfill Tax; 

• the dredging exemption will be restricted to dredged material only from April 2027; 

• the water discounting relief will be removed from 2027. 

The Consultation document can be found here and is open until 21st July 2025.