Reduce the impact of the new landfill tax regulations
- 11 July 2012
- Company & Industry News
With Her Majesty's Revenue and Customs (HMRC) announcing significant changes to its landfill tax, companies in the waste management and recycling sectors need to find ways to ensure their trommel fines are processed and diverted from landfill to avoid a huge increase in landfill tax. Chris Pearson, MD of Pearson Star Screens Ltd, the specialists in waste processing machinery, gives an overview of the new requirements and a guide on how companies could turn waste into saleable material.
In May 2012, HMRC announced two changes to its landfill tax rules. Firstly, fine graded materials from trommels and screens, which have previously been charged at the lower landfill tax rate of £2.50 for inert material, will now be charged the full rate of £64 a tonne for active material. Secondly, waste or material used to cover waste in landfill cells before they are capped will also be taxed at the full rate.
While there are some regulations governing these materials which might mean that some would still qualify as inert, the vast bulk of material will attract the £64 rate, because the exact source and content might not be known, or be suitable.
Many skip hire companies and waste transfer station operators now need to adopt new processes, to help them avoid these hefty bills, which could, for some, be impossible to recover through the skip price or gate fees.
Pearsons suggest a simple approach and are encouraging firms to invest in a 'fines' processing system, incorporating an adjustable star screen and a General Kinematic Destoner. The processing system will process and separate the reusable 'fines' between 10mm and 50mm from the existing Trommel Fines. This way the fines, including stones and soils, can be sold on to builders, landscapers or golf courses etc allowing businesses tomake money back from the processed waste.
After this type of sorting, only a small quantity of shredded paper, plastic and wood will remain. This could either continue into landfill as before, or could be sent for incineration, which, in turn, could be used for power generation.
Based on experience, Pearsons believe that sorted waste going to landfill should actually only account for no more than 5% of the incoming total waste, therefore reducing the potential landfill tax down to a manageable level.
When thinking how to deal with the new legislation, Pearsons recommend firms consider five key areas:
1) What to do with your Trommel Fines? Think about the possibility of reuse or recycling, rather than landfill.
2) How will you sort your waste fines? Do you need to invest in more effective separating equipment?
3) Is there a local market for 'cleaned up' fines material?
4) Depending on your throughput, what would the pay-back period be?
5) What will be the impact on your business if you do nothing?