Accounting for Landfill Disposals Tax

This guidance covers sections 39 to 45 of the Landfill Disposals Tax (Wales) Act 2017. It covers the following areas:

• duty on a landfill site operator (LSO) to make a tax return
• calculating the tax chargeable and the role of a landfill invoice
• payment, repayment and recovery of tax
• duty on an LSO to maintain a landfill disposals tax summary

This guidance should be read in conjunction with Chapter 3, Part 3 of TCMA, guidance on which can be found at TCMA/1010-TCMA/1150.

Landfill site operators must make an LDT tax return to the WRA in respect of each accounting period. The return must contain an assessment of the amount of tax chargeable and make a declaration that, to the best of their knowledge the information they have provided is correct and complete.

Where a landfill site operator has authorised an agent to act on their behalf, the tax return must contain a certification by the agent that the operator has declared that the return is correct. 

For registered landfill site operators, the first accounting period usually begins on the day that they begin to carry out taxable operations; if later, on the day that they register with WRA. This period ends on the day notified to them by WRA. From then on, the accounting period will be each subsequent period of 3 months (see LDTA/5020 on varying accounting periods for the exception to this rule). 

Tax returns must be submitted along with any payment of tax no later than the last working day of the month following the month in which the accounting period ends (the ‘filing date’) (see LDTA/5020 on varying accounting periods for the exception to this rule).

For example, if an accounting period ends on the 30 June, a tax return must be submitted and payment of tax must be made by the last working day in July.

For landfill site operators that have not registered, there is still a duty to make a tax return and the first accounting period begins on the day they begin to carry out taxable operations until the end of the calendar quarter in which the person started to carry out taxable operations (see LDTA/3100 on the duty to register for landfill disposals tax).

For example, if taxable operations begin on the 3 April, the first accounting period will end on the 30 June (with a filing date of 31 July). From then on, each accounting period will be every calendar quarter (i.e. a period of 3 months ending with 31 March, 30 June, 30 September or 31 December).

An LDT return may be amended by the landfill site operator within 12 months of the filing date by notifying the WRA (TCMA/1020).

More information on amending a return can be found in the WRA How to amend your landfill tax return guidance.

Both the duration of an accounting period and the filing date for a tax return can be varied on application, to align with business processes.

A registered landfill site operator must apply in writing to WRA to change an accounting period or filing date.

WRA must issue a notice of its decision to the landfill site operator. If the application is approved, the notice will contain details of the variation. If the application is refused, WRA will issue a notice to this effect. WRA may also vary either the duration of an accounting period or a filing date on its own initiative.  

A landfill site operator must keep such records as needed to enable them to make a correct and complete tax return and to be able to demonstrate this to WRA at a later date. General record-keeping requirements are covered in the TCMA guidance at TCMA/1140.

In terms of LDT-specific records, this includes the following:

• business and accounting records
• transfer notes and any other original or copy records in relation to material brought on to or removed from a landfill site
• all invoices (including landfill invoices) and similar documents that the landfill site operator issues or receives
• all credit and debit notes or other documents received which evidence an increase or decrease in the amount of any consideration for a relevant transaction that the landfill site operator issues or receives
• loss on ignition testing records
• alternative weighing method agreement
• customer insolvency credit record(s)
• non disposal area record(s)
• if applicable, site surveys and chemists' analyses of wastes received for disposal
• the total tonnage of waste accepted for landfill disposal, with separate entries for standard-rated, lower rated, relieved and exempt wastes.
• water discount records

This list is indicative of the required documents but is not an exhaustive list.

There are requirements under the TCMA and the LDTA for how long the records listed above must be kept, which will generally mean that records need to be kept for at least six years after a return’s filing date. This period can be longer if a return has been amended or there has been an enquiry into a return.

The tax chargeable on a disposal made at an authorised landfill site is chargeable to the accounting period in which the disposal is made.

For example, if a taxable disposal was made on the 1 March, it would be chargeable in the accounting period ending 31 March.

The exception to this is where a landfill site operator issues a landfill invoice in respect of a disposal. Issuing a landfill invoice (with the information required by the legislation and explained at LDTA/5050) means that the tax chargeable on a disposal will be due in respect of the accounting period in which the invoice is issued, rather than the accounting period in which the disposal is made.

To take advantage of this rule, the invoice must be issued within 14 days of the disposal, beginning with the day that the disposal is made. This can mean that a disposal is made in one accounting period and the invoice for that disposal is issued in the next accounting period. In this scenario, the tax is chargeable in the later accounting period.

For example, if a landfill site operator is using calendar quarters as their accounting period and a taxable disposal is made on 28 June in relation to which a landfill invoice is issued on 1 July, the accounting period for that disposal will be the calendar quarter ending 30 September instead of 30 June.

If a landfill site operator wishes to extend the 14-day period (i.e. so that they can issue a landfill invoice more than 14 days after a disposal and still take advantage of the rule that the tax will be chargeable in that accounting period), they must apply in writing to WRA. This application may relate to all disposals made at the landfill site or to a specified description of disposals.

WRA will make a decision on such an application and issue a notice of this decision to the landfill site operator. If the application is approved, the notice must specify the longer period and the taxable disposals in relation to which this longer period applies. WRA may issue a further notice varying or withdrawing the approval.

If the landfill site operator does not want to take advantage of rule that says that the tax is chargeable during the accounting period in which the invoice is issued it needs to give WRA notice of this before a landfill invoice is issued.  A landfill site operator may vary or withdraw this notice by giving a further notice to WRA.

The contents of a landfill invoice are outlined in the next section of guidance (LDTA/5050). An invoice must meet the requirements as explained in that section if the landfill site operator wishes to take advantage of the rule discussed above.

The contents of a landfill invoice are set out at Schedule 3 LDTA. A landfill invoice must contain the following information:

1. An identifying number (this number should be unique)
2. The date on which the invoice is issued
3. The name and address of the person issuing the invoice
4. The registration number assigned to that person by WRA
5. The name and address of the person to whom the invoice is issued
6. The date on which the taxable disposal is made
7. A description of the material in that taxable disposal
8. The rate of tax chargeable on the material in the taxable disposal
9. The taxable weight of the material in the taxable disposal
10. Any discount applied under section 19 (3) of the LDT Act in respect of water present in the material
11. Any relief claimed in relation to the taxable disposal
12. The amount of tax chargeable on the taxable disposal
13. The total amount of consideration payable in respect of the invoice

Where a landfill invoice is issued in respect of more than one taxable disposal, it must show for each disposal the information specified in 6 to 12 above.

The amount of tax stated in the tax return must be paid on or before the filing date of the return.

Late filing of the return or late payment of the tax will make the landfill site operator liable to penalties. More information on penalties is available under our TCMA technical guidance.

If a landfill site operator amends the return, the tax must be paid either no later than the filing date (if the return is amended before the filing date) or when the person notifies WRA of the amendment (if amended after the filing date). TCMA guidance covers payment requirements where a return is amended in other circumstances (for example by WRA or during an enquiry).

Generally, the tax as assessed on the return is the tax chargeable. Where a claim to customer insolvency credit is involved, the liability may change. See our technical guidance on customer insolvency credit.

Each landfill site operator must keep a record known as a landfill disposals tax summary. This summary is required for each accounting period and must contain the following information:

• the amount of tax chargeable
• the amount of tax credit claimed (if applicable)
• the amount of tax paid

WRA may further specify the content and format of this record.

A landfill disposals tax summary is a record required to be kept and preserved in accordance with section 38(1) TCMA. Failure to keep these records may result in a penalty for failure to keep proper records and potentially an inaccuracy penalty.

See our TCMA guidance on penalties for more information.

Where a landfill site operator asks WRA to review a decision, or appeals to the tax tribunal against a WRA decision, because it thinks that an excessive amount of tax has been charged, they may ask WRA to postpone the recovery of the tax (or a part of it).

In making a postponement request, the landfill site operator must specify the following information:

• the relevant amount of tax
• the reasons why they think the amount of tax charged is excessive
• why they think that the recovery of the tax would cause financial hardship

WRA may grant a postponement request where it thinks that the landfill site operator has reasonable grounds for thinking that the amount is excessive and where it thinks that to recover the that amount would cause the landfill site operator financial hardship.

This will need to be considered on a case-by-case basis, but may include circumstances where there is a genuine dispute between WRA and the landfill site operator (for example relating to the interpretation of the law) and where the payment of the tax in advance of settling that dispute could have a significant, detrimental financial impact on the running of the landfill site.

If WRA agrees to postpone the recovery of the tax, it may make that conditional on the landfill site operator providing adequate security.