A waste firm that challenged councils’ ability to be VAT exempt from trade waste collections is considering an appeal after the legal case was dismissed, LGC’s sister title Materials Recycling World reports.
The Local Government Association described the decision made in the High Court on 19 September as a “huge victory for councils”.
Had the ruling gone the other way, the LGA warned that councils could have lost up to £77m a year from their waste budgets.
LGA environment spokesman Martin Tett (Con) said: “This is fantastic news and a huge victory for councils. It will mean savings of many millions to them at a time when many local authorities have experienced substantial budget reductions.
“Councils want to do everything they can to support local businesses, and potentially absorbing the extra 20% would have had a major impact on budgets, meaning them spending less on things like caring for old people and fixing potholes.”
The case was brought by north-east recycling business The Durham Company, trading as Max Recycle. Managing director Scott Hawthorne told MRW his company would now decide whether to appeal the decision.
He said: “Both parties, HMRC and ourselves, wanted this dealt with on an across-the-board basis. The judge seems to have not wanted to make the decision that impacts everybody one way or another and would like to deal with it on a case-by-case basis.
“We need to have a conversation with HMRC and see whether we continue with an appeal on this preliminary issue or whether we single out one or two councils in the manner that the judge is suggesting.”
Mr Hawthorne said his company would consider proceeding with a separate issue, regarding the extent to with the exemptions affect market forces and competition, if the current case is unsuccessful.