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LANDFILL TAX: GOVERNMENT MEETS INDUSTRY CONCERNS

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David Heathcoat-Amory, the Paymaster General, has announced an exemption from landfill tax for mineral waste from m...
David Heathcoat-Amory, the Paymaster General, has announced an exemption from landfill tax for mineral waste from mining and quarrying operations, in response to industry concerns.

He has also announced that Customs will apply penalty rules sympathetically during the first year of operation.

Commenting on the exemption the Paymaster said: 'It was never our intention to tax such waste. Following discussions with representatives of the industry it is now clear that considerably more such waste goes to licensed sites than was originally thought to be the case. The government was persuaded that imposing the tax would have a distortive effect within the industry.'

The exemption will apply to mineral waste which does not undergo any process changing its chemical nature and will apply to all such waste, whether landfilled at the point of production or elsewhere.

There will be little change to the projected revenue yield announced in the Budget because the government had not intended to tax such waste so the yield from taxing mines and quarries waste was not included in the projections. To give Customs time to consult the industry on the precise wording of the amendment to the Finance Bill, the necessary amendment will not be tabled until after discussions with the industry have taken place.

The government has also announced that the department will take a sympathetic view of genuine errors made as a result of unfamiliarity with or misunderstanding of the tax provision during its first year.

However, Customs reserve the right to assess the duty properly due, when considering whether to impose penalties and interest. Similar arrangements were made during the introduction of insurance premium tax and air passenger duty. This means operators will not be penalised for a first default in the first year, unless it was thought that deliberate evasion or manipulation was involved.

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