The Landfill Tax was introduced in October 1996 and is levied on waste deposited in landfills. The objectives of the tax are to

·        encourage waste producers to minimise the volume of waste generated

·        reduce the amount deposited in landfills

·        encourage recycling

Landfill operators are liable for the tax on all consignments of wastes accepted for landfill disposal.

A distinction is made between inactive waste, which is taxed at £2 per tonne, and other waste at the standard rate of £10 per tonne.

In the March 1999 budget, the Chancellor announced that the standard rate will be subject to a landfill tax escalator of £1 per tonne per year for at least another five years, reaching £15 per tonne in 2004. This is designed to increase the incentive to re-cycle or incinerate waste (see below)

EXEMPTIONS TO THE LANDFILL TAX

A number of categories of waste are exempt from taxation. These are:

·        dredgings from inland waterways and harbours

·        naturally-occurring minerals from mines and quarries

·        domestic pets, buried in pets' cemeteries

·        wastes from the remediation of historically contaminated land if the purpose of the remediation is development, conservation or the provision of amenity, or to remove the potential harm from pollutants

Areas at landfill sites where waste is sorted, recycled or incinerated may be designated tax-free areas.  Critics of the Landfill tax argue that it has had little impact on the environment and has caused a surge in illegal "fly-tipping" in both urban and rural areas.