International Review of Waste Management Policy - Department of ...

The UK Landfill Tax was introduced in October 1996. It is a tax on all landfilled waste,
with some exemptions. It is applied at two rates: a standard rate, applied to a range
of materials, including household waste; and a lower rate, applying to specific
‘qualifying materials’, typically, those deemed to be ‘inert’, including materials such
as rubble.
The tax affects all sectors of the economy. As the levels of landfilling at the
introduction of the tax were very high, the tax could be considered a ‘general disposal
tax’, as most residual waste was (and still is) disposed of to landfill.
The aims of the tax as set out in the UK Waste Strategy were:
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‘to ensure that landfill costs reflect environmental impact thereby encouraging
business and consumers, in a cost effective and non regulatory manner, to
produce less waste; to recover value from more of the waste that is produced;
and to dispose of less waste in landfill sites (DoE and WO 1995, 12).’
From this, it seems clear that the primary aim was, in the early stages, to internalise
external environmental impacts.
Ecotec’s report on taxes and charges in the EU indicates that the tax level and the
proposals for the tax were widely consulted on before being introduced. 949 The initial
rates at which the tax was set were:
� Inert Wastes (lower rate tax) £2 per tonne
� Active Wastes (standard rate tax) £7 per tonne.
Mixed wastes are taxed as active wastes even if much of the material is ‘inert’ if
certain minimal levels of mixing are exceeded.
A report describes how the tax has evolved as follows: 950
� 1993 – The introduction of the Landfill Tax was preceded by an assessment of
the external costs associated with landfill and incineration and by work
assessing waste management options in the UK after the introduction of such
a tax. 951 A proposal for a tax based on a percentage of disposal costs (an ad
valorem tax) emerged, with the order of magnitude of the tax heavily
influenced by the external costs study;
� November 1994 – Government makes clear its intention to introduce the
Landfill Tax;
� March 1995 - a consultation process was undertaken to elicit the views of
industry, environmentalists, and local authorities. Its major outcome, as
949 ECOTEC (2001) Study on the Economic and Environmental Implications of the use of Env. Taxes &
Charges in the EU.
950 Eunomia et al (2007) Household Waste Prevention Policy Side Research Programme, Final Report
for Defra
951 CSERGE, Warren Spring Laboratory and EFTEL (1993) Externalities for Landfill and Incineration: A
Study by CSERGE, Warren Spring Laboratory and EFTEL. Coopers & Lybrand (1993) Landfill Costs and
Prices: Correcting Possible Market Distortions.