Following the Budget announcement on 16 March 2016, HM Revenue & Customs have released their Landfill Tax Briefing. The Briefing covers landfill tax, the Landfill Communities Fund (LCF) and future communications.
A summary of the points relating to the LCF is below and the full briefing document is to the right hand side of this page, along with a copy of the draft guidance.
The Landfill Communities Fund (LCF)
Maximum percentage credit for 2016-17
The value of the LCF for 2016-17 was announced at Autumn Statement 2015 and set at £39.3 million. The maximum credit that landfill site operators may claim against their annual landfill tax liability for LCF contributions made to Environmental Bodies (EBs) will be 4.2% from 1 April 2016.
LCF Reform
Autumn Statement announced a number of changes to the LCF in England, Wales and Northern Ireland to take effect from 1 April 2016. Draft legislation required to implement the changes was published on 9 December [2015] and includes a simplification of record-keeping requirements and changes to the scheme's objectives from 1 April 2016.
Following the announcement, a number of operators and EBs voiced concerns about the proposed removal of provisions for third parties to contribute 10% of landfill operators' contributions to projects. The Government has listened to these concerns and decided against proceeding with the removal. The draft legislation (amendments to the Landfill Tax Regulations 1996) has been amended to reflect this decision. The revised statutory instrument, which includes the value of the fund for 2016-17, was laid on Budget Day and published on www.gov.uk. A link to the legislation can be accessed here http://www.legislation.gov.uk/uksi/2016/376/made
Landfill operators can claim tax credit for 90% of their contributions to the LCF. Some landfill operators already pay the 10% shortfall. Although there will be no legislative requirement, landfill operators will be expected to help local communities by increasing their contributions and absorbing some or all of the 10% shortfall. Landfill operators' contributions will be monitored by ENTRUST and details may be published on an annual basis. ENTRUST published amended guidance to reflect these changes on Budget Day.
Environmental Body levy
The ENTRUST levy for 2016-2017 is set at 2.96%. This was published by ENTRUST on their website on Budget Day.