If you’re dealing with commercial waste, you will no doubt have come across Waste Landfill tax, but you may not realise that the tax originates back to government changes made back in 1995. In this post, we’ll take a look at the history and motivations behind the tax, and how it affects your general waste collections.
Environmental concerns leading to the Waste Landfill Tax
Back in 1995, the UK government was faced with growing environmental concerns from pollutants in the water system resulting from decomposing waste, biologically inactive incinerated waste in the form of slag and ash and increasing pressure from the EU to improve environmental health standards. To try and combat these issues a proposal was made which they believed would reduce the amount of waste sent to landfill, encourage recycling, and help meet government quotas. This proposal would eventually become the Waste Landfill tax.
The Waste Landfill Tax method of taxation – Waste by Weight
To begin with, it was argued that the tax should be collected via an “ad valorem charge”, which is a method of charging a duty, fee or tax based on the value of goods and services, rather than by weight or quantity. It was initially thought that this would be the quickest and easiest way to discourage landfill disposal of waste and would be easy to enforce.
While many members of local and central government agreed with the idea to create a landfill tax, many felt that by doing so “ad valorem” would not work to help the government meet its environmental goals. It was feared that this method of taxation would lead to companies disposing of their waste in the cheapest available landfill sites, which may have lower environmental standards, or would send their waste to be incinerated rather than buried which would create its own environmental consequences, and may increase the illegal tipping of waste.
Additionally, it was argued that many commercial and small industrial units were paying for the disposal of their waste as part of their rent, or by the size of containers and therefore the tax would fail to send a strong enough message encouraging waste minimisation.
Therefore, in August 1995 the Government decided that the tax would be weight-based, charged per tonne of waste. This would mean that the charge would be applied equally to waste no matter which landfill site it was being disposed at. Consequently, this is the reason that all commercial waste is now measured in weight rather than volume, and why there are now legally binding weight allowances on commercial waste contracts.
Why businesses are charged for excess waste weight?
All businesses that produce or handle waste are subject to the Landfill tax, including your waste collection company. These companies pass on the costs of the tax to their clients by charging by weight.
When commercial waste management contracts are created, service providers will always aim to supply businesses with the most appropriate collection service and sized bin with an agreed-on weight limit. This weight limited is used to calculate the cost of the service and incorporates the weight-based tax that waste collectors are subject to when they tip your waste.
Any waste produced that is over a business’s weight allowance will create unexpected charges for the waste collector when the waste is tipped at a landfill site, these costs are then passed back to the customer through “excess weight” charges.
CheaperWaste and Excess weight charges
CheaperWaste is obligated to pass on excess weight charges from our suppliers to customers who have exceeded their weight allowance. When this happens, we do not inflate the rate at all, and it is simply a consequence of the landfill tax.
We understand that from time to time businesses may experience an unexpected surge in the amount of waste produced, this is why when we become aware of excess weight from our suppliers, we will try to work with you to alleviate the problem. We will aim to establish if the excess weight is a one-off, or if a larger bin/ more frequent collections are needed.
If you are producing more waste than expected, we will advise you to change your service or bin to one that will better suit your needs. While additional collections or bigger bins will incur slightly higher costs, they are usually much more manageable than unbudgeted excess weight charges.
Contact us today to discuss your waste management needs.