Landfill Tax and the Landfill Communities Scheme

Landfill Tax
A landfill tax was introduced in October 1996 in an attempt to reduce the amount of waste being sent to landfill. This tax is the main fiscal driver for the diversion of commercial and industrial wastes to alternative waste management processes.

Since 2007 the tax has been subject to an escalator of £8 per tonne each year towards a medium- to long-term target of £48 per tonne from its current standard rate of £32 per tonne. Inert wastes used in the restoration of landfill sites and quarries have been exempt since 1 October 1999.

Landfill tax revenues have contributed over £800m to environmental bodies through the Landfill Communities Fund (formerly the Landfill Tax Credit Scheme).

Landfill Communities Fund
The Landfill Communities Fund (formerly the Landfill Tax Credit Scheme) permits up to 6.6% of the taxes collected by Landfill Operators to be claimed against environmental projects. The scheme was designed to help mitigate the impacts of landfill on the surrounding communities and has funded a wide variety of projects, ranging from restoration of village and community halls to in-depth research into improved recycling and composting processes.

All projects must comply with certain 'approved objects' defined within the Landfill Tax Regulations.

The Chancellor announced in the 2008 Budget Statement that the value of the Landfill Communities Fund would be increased to £70m.