Waste crime has been identified by the government as one of the most critical problems in the environmental sector.
The government is, therefore, making efforts to tackle illegal waste management activity and, as part of that, is making changes to the law which could catch out landowners if they are not prepared.
Landfill tax on illegal deposits of waste
Avoiding landfill tax is one of the main drivers for illegal waste management activity, in particular fly-tipping. Illegal waste disposal sites that are not registered for landfill tax undercut legitimate landfill sites. However, from 1 April 2018 the landfill tax regime will be changing in England and Wales. The new changes will apply to both permitted and non-permitted landfill sites, but the tax rates will be different in England and Wales.
- Sites in England which operate without the necessary environmental permit will be liable for landfill tax at the standard rate (£88.95 per tonne) on all material.
- Sites in Wales which operate without the necessary environmental permit will be liable for landfill disposals tax (as the tax is to be known in Wales from 1 April 2018) at an unauthorised disposals rate of £133.45 per tonne (150% of the rate in England).
- All material at illegal sites on and after 1 April 2018 will be caught by the tax. Currently, certain material deposited at permitted sites is exempt from landfill tax, but the changes will disapply the exemptions for illegal sites so that all material deposited at them is taxable.
- Any person who deposits waste or knowingly permits the deposit of waste at an illegal site could become liable for landfill tax, in addition to facing a separate criminal prosecution for waste offences.
- HMRC will be able to charge an additional penalty of up to 100% of the tax due, and will also have the right to prosecute those who do not pay.
New powers to require owners and occupiers of land to remove illegally stored waste
From 9 May 2018 the Environment Agency, Natural Resources Wales and local authorities will all be able to serve a notice on the occupier of land requiring it to remove illegally stored waste, regardless of whether or not the waste was illegally deposited on the land in the first place. It will be a criminal offence to fail to comply with such a notice. Previously, regulators only had the power to require the removal of waste that had been illegally deposited.
An unwelcome change for landowners is that if the land is unoccupied or the regulator cannot identify the occupier without incurring unreasonable expense, then the notice can be served on the landowner. Further, if a notice is served on the occupier and it fails to comply with the notice, or if it successfully appeals against a notice on the grounds that it didn't keep or deposit, or knowingly cause or knowingly permit, the keeping or deposit of the waste, then the regulator can serve a new notice on the owner of the land.
What does this mean for landowners?
Although the government has indicated that safeguards will be in place to ensure that landowners and waste producers who are unknowingly involved in illegal waste disposal activity will not be liable for the new landfill tax penalties, in practice it may be difficult for a landowner to prove that waste is not being stored illegally on a site where it was deposited lawfully, particularly where the occupier's permit has expired or been revoked, or where the occupier changes.
Even if they are safeguarded against liability for landfill tax, landowners may still find themselves liable for the costs of removing waste brought on to their land lawfully, but subsequently stored illegally. The government has not undertaken any impact assessment of the likely costs to landowners in England, but the Welsh Government's impact assessment estimates that the costs to landowners of clearing waste from their land would be between £26,850 and £84,600.
What can landowners do to protect themselves?
Landowners should ensure greater due diligence is undertaken at the outset when considering potential tenants and other occupiers of their land who intend to use the land for waste management activities. Where occupiers are already in place, landowners should undertake a review of any environmental permits or exemptions they hold, in order to ensure that the site is operating lawfully and within the limits of any permit or exemption. Consideration should also be given to requiring occupiers undertaking waste management activities to provide a deposit or other security to the landowner, which the landowner can use if it incurs any liability to pay landfill tax or to remove waste from the land.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.