Landfill Disposals Tax statistics: July to September 2020

For waste disposed to landfill in the period July to September 2020:

• there were 283 thousand tonnes of authorised disposals. This is a 2% increase compared with the same period in 2019 and corresponds with a period where some coronavirus (COVID-19) restrictions introduced in March were lifted
   
• these disposals resulted in £10.1 million tax due. This is a fall of 7% from the same period in 2019
   
• there is evidence of a seasonal pattern in the data. Shorter days in winter months are potentially a factor
   
• the 5 landfill site operators paying the most tax accounted for 85% of the total tax due
   
• there are 17 authorised landfill site operators covering 23 sites. More information on these landfill site operators can be found on the Welsh Revenue Authority (WRA) website

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Introduction of LDT

From April 2018, Landfill Disposals Tax (LDT) replaced Landfill Tax in Wales. We, the Welsh Revenue Authority, collect and manage LDT. The tax is designed and made in Wales and the revenue raised will support Welsh public services.

Like Landfill Tax, LDT is a tax on waste disposed to landfill and is charged by weight. Landfill site operators pay the tax and they pass these costs on to other waste operators through their gate fee. 

The purpose of the tax is to:

• reduce the amount of waste going into landfill
   
• encourage less harmful methods of waste management such as recycling and incineration

Value of LDT statistics

LDT statistics are a valuable source of data on the amount of waste going into landfill.

Forecasting LDT revenues for Wales in future is an important use of LDT statistics. It is mainly the Welsh Government and the Office for Budget Responsibility that do this.

Data available for LDT

All of the data used in this statistical release is available in a spreadsheet on the headline statistics page.

Data is also available on the StatsWales website.

Key quality information and glossary pages

Please see the separate glossary and key quality information pages while reading this statistical release:

• we define relevant terms in the glossary as they are used in this release
   
• our key quality information page describes how LDT statistics meet the Code of Practice for Statistics and the dimensions of value, trustworthiness and quality

Revisions to LDT statistics

The quarterly estimates in this release are based on the latest three-month accounting period for each landfill site operator. Each LDT return may be verified as part of mitigation and recovery work that the WRA carries out routinely and may therefore be revised in future.

In the following section, we explain the methods we use to derive the statistics from the data supplied in the returns.

Accounting periods

Most landfill site operators report to the WRA using standard accounting periods. These align with the end of our reporting quarters.

A small number of landfill site operators use different start and end dates for reporting to the WRA. We explain here how we account for this issue when producing estimates for the current and previous reporting quarters.

In the example shown below:

• Operator 1 has a standard accounting period
   
• Operator 2 has agreed a different accounting period with the WRA. The start and end points are different to our standard reporting quarters

A + B: Two thirds of the previous return and one third of the latest return are used to give estimates for the previous quarter.

C: The portion of the return covering the latest period is uplifted to give estimates for the current quarter. The uplift is pro-rata based on the number of days in the current quarter covered by the return.

Reliefs and discounts

Where waste is referred to as relieved, landfill site operators initially record this as lower rate waste then subtract it off in a later part of their return. This release reports the relieved waste within the relieved or discounted category but not as part of the lower rate category. Also, the weight of any discounted waste due to water discounts is included only in the relieved or discounted category.

Unauthorised disposals

No data are yet available on unauthorised disposals. We will keep this under review. When we have enough data, we will provide more detail on our approach to publishing information about unauthorised disposals.

Customer insolvency

The LDT system allows for a credit to be made against the tax due for customer insolvency. This is when a customer of the landfill site operator has gone out of business and is unable to pay the operator for the waste disposed to landfill.

Previously, a very small amount of credit was claimed by one operator in the reporting quarter July to September 2018. However, the WRA rejected this claim and tax was due on this amount.

A small amount of credit was claimed by one operator for the reporting quarter July to September 2019. The WRA approved this claim. In this statistical release, we have subtracted the amount claimed from the total tax due.

Exempt disposals

Certain disposals of material can be treated as exempt from LDT and therefore are not reported to the WRA. We do not collect data on these exempt disposals.

Tax rates that apply to Tables 1a and 1b

The Welsh Government has set rates that match those in the rest of the UK for 2018-19 to 2020-21.

Table 1a: Weight of waste disposed to landfill [1] [5]

Landfill Disposals Tax statistics by reporting period, tax rate and measure on StatsWales (includes data for 2018-19, not presented above)

[1]    This table does not include any information on unauthorised disposals as no data are yet available.
[2]    Weights presented have been rounded to the nearest 1,000 tonnes.
[3]    This includes weight of water removed from disposed waste, which is zero rated, and the weight of all waste which is subject to any LDT relief.
[4]    Totals presented have been calculated based on the unrounded values.
[5]    The table excludes a small number of amendments to tax returns which we have received. This is because we are assessing the risk of disclosing information about an individual taxpayer.
(p)    The values are provisional and will be revised in a future publication.
(r)     The values have been revised in this publication.

Commentary on Table 1a

The latest period covered in this release coincides with the lifting of some of the coronavirus (COVID-19) restrictions, although some local restrictions were re-introduced towards the end of the period.

The initial restrictions led to a drop of 26% in disposals in April to June 2020, compared with the same period a year earlier. The data for July to September 2020 shows that there has been a recovery in the levels of waste disposed, which is now at a similar level compared to that in July to September 2019 (up slightly at 2%).

The LDT operations team is in regular discussions with landfill site operators about the effects of coronavirus (COVID-19) on their businesses. Coronavirus has had a major impact on the business of some landfill site operators this year. The impact of coronavirus on the waste sector for the rest of the 2020-21 year remains uncertain.

Table 1b: Tax due on waste disposed to landfill [1] [5]

Landfill Disposals Tax statistics by reporting period, tax rate and measure on StatsWales (includes data for 2018-19, not presented above)

[1]    This table does not include any information on unauthorised disposals as no data are yet available.
[2]    Values presented have been rounded to the nearest £0.1 million.
[3]    Totals presented have been calculated based on the unrounded values.
[4]    This is the reduction in tax due to the applications of reliefs. The amount does not include any element for water discount, which is not taxed.
[5]    The table excludes a small number of amendments to tax returns which we have received. This is because we are assessing the risk of disclosing information about an individual taxpayer.
(p)    The values are provisional and will be revised in a future publication.
(r)     The values have been revised in this publication.

Commentary on Table 1b

As highlighted in the commentary below Table 1a, July to September 2020 has seen a recovery in the level of tax due (compared with April to June 2020).

The disposals for July to September 2020 resulted in £10.1 million of tax due, a fall of 7% from the same period in 2019. This is despite the slight rise in the weight of disposals, where the increase was due to a rise in relieved and discounted weight with no tax due.

There is evidence of a seasonal pattern in the data, with shorter days in winter months potentially a factor. In future, we may be able to isolate these effects from the more general trends in the data. But we will need several years’ worth of data before that becomes possible, and the impact of coronavirus (COVID-19) is now an added complication in this regard.

For July to September 2020, the five landfill site operators paying the most tax accounted for 85% of the total tax due. In three-month periods prior to this, the figure has varied between 80-90%.

The relieved tax amount represents how much tax would have been due had the reliefs not been applied.

Receipts of LDT

Table 2 below shows quarterly receipts received for LDT. This is based on the date the payment was received, sometimes referred to as ‘on a cash basis’.

Table 2: Landfill Disposals Tax (LDT) paid to the WRA [1]

Landfill Disposals Tax statistics on tax paid, on StatsWales (includes data for 2018-19, not presented above)

[1]    Values presented have been rounded to the nearest £0.1 million.

Commentary on Table 2

In July to September 2020, we received £9.9 million of LDT payments. This is 2% lower than the same period in 2019.

The trends in these data usually differ slightly from the data on tax due. This is because these trends are influenced by the exact accounting periods agreed with the LDT operators and the resulting payment dates. This can lead to payments falling into different quarters to the activity they cover. As a general rule, figures for cash receipts broadly align with the total due for the previous quarter.

That broad alignment has not been the case in the last two quarters as some operators have agreed Time to Pay arrangements with the WRA where the coronavirus pandemic has impacted their revenue streams. The WRA have agreed with these operators that for disposals made in January to March 2020, payment of the tax due can be spread throughout the 2020-21 financial year. Most of the revenue subject to these agreements has been paid by the end of the second financial quarter in 2020-21.

No such agreements have been made for tax due on disposals so far in 2020-21.

The key quality information page describes how our Land Transaction Tax statistics meet the Code of Practice for Statistics and the dimensions of value, trustworthiness and quality.

We define relevant terms in the glossary as they are used in this release.

We would be grateful for your feedback on these statistics, to help us improve them. Please contact us using the details below.