Taxation - UK

The Finance Act 1996 requires landfill site operators to pay landfill tax for the disposal of material as waste by way of landfill at a landfill site.

The condition for a disposal to be taxable is further qualified in that the disposal of material is a disposal as waste if the person making the disposal does so with the intention of discarding the material.

Waste Recycling group Ltd (WRG), operator of some 60 landfill sites across the UK, sought a refund of landfill tax paid in respect of inert materials, recycled from waste, used to provide daily cover for active waste and for the construction of roads on its landfill sites.

WRG claimed that such use did not give rise to a taxable disposal as the material had not been disposed of as waste.

This claim was refuted by HMRC and subsequently by the VAT and Duties tribunal. However, WRG took their case to the High Court and won.

Maintaining that such use was a taxable disposal, HMRC asked the Court of Appeal to reverse this, but, the Court of Appeal declined, upholding, in part, the judgment of the High Court.

The Court found that such use of material recycled from waste used for daily cover and for building roads on a landfill site is not a taxable disposal.

Furthermore, in considering whether WRG had intended to discard the materials the Court held that at the relevant time there was either no disposal or no disposal with the intention to discard the material.

The Court stated that there was no principle that material once labelled waste is always waste just because its original producer of it threw it away.

The full judgement of the Court of Appeal in this case can be found here.

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