Government has decided to phase out by April 2012 the landfill tax exemption which currently applies to the material.

The move is intended to encourage companies to clean up the contaminated soil before disposing of it.

Vincent Brown, a partner at law firm Semple Fraser, said that although it is Government policy to give firms help with cleaning up contaminated land, the landfill tax exemption is undermining Ministers’ aims to reduce the environmental damage caused by landfilling waste.

He said that the exemption is likely to be completely withdrawn by April 1 2012, and companies will now have to apply for exemption certificates by December 1.

Angela Eagle, Exchequer Secretary to the Treasury, was responsible for signing the Order to phase out the exemption, as it will amend the Finance Act.

She said: “We believe the time is right to phase out this exemption. The order will achieve the phase-out in a way that ensures that the exemption comes to an end within a defined period.

“At the same time, those who have worked up projects for land in expectation of being able to benefit from the exemption will have a reasonable opportunity to do so.”

Waste from land remediation has been exempt from landfill tax since 1996, but Government said the policy is now “out-of-step” with its other environmental goals.

Ministers said phasing out the exemption instead over the next few years would minimise the impact on projects which are already underway, and have been set budgets on the basis of the exemption being in place.

Kate Martin

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