Study reveals waste operators are paying up to 70% more landfill tax since LOI rules came in
An industry study by Impact Air Systems, the global waste extraction and separation specialists, has revealed that 80 percent of waste operators have been hit hard with increased tax bills since the loss on ignition (LOI) regulations were introduced.
In 2015, the LOI testing regulation came into force through the Landfill Tax (Qualifying Fines) Order. Now that the transition period for the 15 percent threshold is over, Impact Air Systems has undertaken research to find out how the industry is managing the changes.
Waste operators are now required to have samples of their waste tested to ensure they are paying the correct amount of landfill tax, but 30 percent of businesses have not yet had their waste ‘fines’ laboratory tested.
Extra demand from waste managers
After experiencing high levels of demand from waste managers wanting to further recover valuable commodities from the fines in their waste streams, and hearing anecdotal evidence about the pressures the new regulations have created, Impact Air Systems decided to take a deeper look at how industry operators have been affected.
The research has revealed that the majority (80 percent) of the organisations affected by the changes have paid up to an additional 70 percent in landfill tax since the changes came into force last year.
The study showed that the new tax threshold has changed the way waste operators choose to recycle to save money, as 65 percent stated they are finding alternative waste management solutions. This included investing in new equipment for further processing such as density separation, additional screening, detailed reviews of waste streams, extracting inerts and strict regulations around the type of waste entering the facility.
The survey also revealed 62 percent of waste managers would like clearer information about the new tax threshold for waste fines, to enable them to pay the right amount and look at new ways to reduce their tax liability.
Nick Ball, managing director of Impact Air Systems explains his reason for undertaking the survey:
“Every week we meet waste managers in our testing facility that are conducting research and development for ways to further separate their waste to ensure any remaining value has been extracted from the waste stream to increase revenue and minimise disposal costs. This then results in the reduction of their LOI, so they become liable for the lower tax amount.
“It became apparent that there was an industry issue, with so many waste managers admitting to the high landfill tax bills they now receive and the pressure they are under to reduce this. It is important for us to work with waste companies to assist them with their responsibilities, both environmental and commercial.”
Impact Air Systems plans to share their findings with the government officials responsible for providing guidance for LOI testing and regulations to promote positive change.