Landfill Disposals Tax statistics: October to December 2023

Landfill Disposals Tax (LDT) is a tax on waste disposed to landfill, charged by weight, and landfill site operators pay the tax. There are 17 authorised landfill site operators covering 20 sites. The intention of the tax is to reduce the amount of waste going into landfill and encourage less harmful methods of waste management such as recycling and incineration. 

The Welsh Government has set tax rates that match those in the rest of the UK for the financial years 2018-19 to 2023-24.

LDT statistics are a valuable source of data on the amount of waste going into landfill. LDT has an important role in the Welsh Government plan to achieve net zero emissions.

Forecasting LDT revenues for Wales in future is an important use of LDT statistics. The Office for Budget Responsibility produce LDT forecasts to coincide with Welsh Government and UK Government budgets.

The glossary defines relevant terms used in this release. Our key quality information describes how LDT statistics satisfy the Code of Practice for Statistics. 

LDT statistics are accredited official statistics. In February 2022, the Office for Statistics Regulation independently reviewed and accredited these statistics as complying with the standards of trustworthiness, quality, and value in the Code of Practice for Statistics. Accredited official statistics are called National Statistics in the Statistics and Registration Service Act 2007.

Our statistical output policy explains the policies and procedures we have in place for publishing official statistics. We also publish the list of posts which have pre-release access to our statistics, including for LDT.

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All analysis in this release excludes unauthorised disposals. The WRA has collected a very small amount of tax relating to unauthorised disposals. Due to the small number of tax cases concluded to date, it is not yet possible to publish any statistics relating to unauthorised disposals. We will keep our approach to publishing unauthorised disposals statistics under review in future releases.

For waste disposed to landfill in the period October to December 2023:

• There were 277 thousand tonnes of authorised disposals. This is a 2% increase compared with the same period in 2022. A large decrease in standard rate disposals was offset by a larger increase in relieved or discounted disposals, and a small increase in lower rate disposals.
• These disposals resulted in £7.1 million of tax due. This is 28% lower than the tax due for the same period in 2022. Possible reasons for this trend include:
  • effects of environmental policy in encouraging less harmful methods of waste management such as recycling and incineration
  • variability in the volume of disposals at particular sites where the landfill cells are full or nearly full, and some landfill sites nearing end-of-life
• There is evidence of a seasonal pattern in the data. Shorter days in winter months are potentially a factor in the level of disposals. 
• Fines material accounted for 34% of the weight of waste disposed at the lower rate, the smallest quarterly figure seen to date. Soils and stones accounted for 31%. It is unclear if a seasonal pattern will emerge in this data, and we will continue to monitor this in future.
• 5 landfill site operators accounted for 94% of the total tax due, the highest percentage seen to date. In previous quarters, the figure varied between 80% and 90%.

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Adam Al-Nuaimi, Head of Data Analysis in the WRA, commented on these statistics:

“The Landfill Disposals Tax due for October to December fell by over a quarter from the same period a year earlier, mainly due to a large fall in standard rate disposals.

“The overall weight of waste disposed rose marginally from a year earlier, with a large fall in standard rate disposals offset by a large rise in relieved and discounted disposals and a small rise in lower rate disposals.

“It remains to be seen if the recent falls in standard rate disposals are due to circumstances at certain landfill sites, or a return to the general downward trend we have seen after the coronavirus pandemic.”

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All analysis in this release excludes unauthorised disposals. The WRA has collected a very small amount of tax relating to unauthorised disposals. Due to the small number of tax cases concluded to date, it is not yet possible to publish any statistics relating to unauthorised disposals. We will keep our approach to publishing unauthorised disposals statistics under review in future releases.

The analysis in this release includes some statistical corrections that have been applied. The reasons why we make statistical corrections include:

• where we know that information on a tax return is incorrect and we are awaiting a taxpayer amendment to be submitted to us
• where a taxpayer amendment is being reviewed by the LDT operations team for its validity, we may make statistical corrections to undo the effect of the amendment within our statistics

Tables 1 and 2 show percentage changes for the latest quarter against the same period a year earlier. Some percentage changes are large as they are based on small numbers, therefore we advise caution on interpreting any large percentage changes shown.

Source: Landfill Disposals Tax statistics by reporting period, tax rate and measure on StatsWales

[Note 1] Fines are particles of material produced by a mechanical waste treatment process. Landfill site operators must ensure certain criteria are met for the material to be treated as qualifying fines at the lower rate of tax. Please see the glossary page for further information.

[Note 2] Data for these categories represents non-qualifying fines material, grouped by List of Waste (LoW) code. The groupings used for these three categories is presented in our glossary page.

[Note 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.

[Note 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.

Figure 1: Weight of waste disposed to landfill, by tax rate and quarter

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Description of Figure 1: The line chart shows that since April 2018, seasonal variations have generally been seen in the quarterly weight of standard rate disposals, though with considerable falls in the latest 4 quarters compared with the same periods a year earlier. Lower rate disposals fluctuated, appearing to follow no set pattern, while relieved or discounted disposals were generally low in the previous three years before the generally higher numbers seen since April 2022. 

Source: Landfill Disposals Tax statistics by reporting period, tax rate and measure on StatsWales

[Note 1] 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.

[p] The values for October to December 2023 are provisional and will be revised in a future publication.

[r] The values for July to September 2023 have been revised in this publication.

Table 1 shows that in October to December 2023, there were 277 thousand tonnes of authorised disposals. This is 2% higher than the same period in 2022.

Within this total, there were 66 thousand tonnes of disposals at the standard rate, which is 32% lower than the same period a year earlier. This is the second lowest quarterly value seen to date, outside of 2020-21 which was heavily impacted by the coronavirus (COVID-19) pandemic.

Possible reasons for the considerable decrease from a year earlier include:

• effects of environmental policy in encouraging less harmful methods of waste management such as recycling and incineration
• variability in the volume of disposals at particular sites where landfill cells are full or nearly full, and some landfill sites nearing end-of-life

The LDT operations team continue to engage with landfill site operators to understand reasons for trends and to support future commentary.

The 141 thousand tonnes disposed at the lower rate was 4% higher than in October to December 2022. Commentary below Figures 3 and 4 analyses the categories within lower rate data contributing to this trend.

In October to December 2023, the 70 thousand tonnes of relieved or discounted disposals was higher than 39 thousand tonnes seen in the same quarter a year earlier. This was the second highest figure seen since March 2019, except for April to June 2022. The level of relieved or discounted waste has varied greatly over time. It is not straightforward to determine whether the amounts of relieved or discounted waste will rise or fall in future.

Figure 2: Tax due on waste disposed to landfill, by tax rate and quarter

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Description of Figure 2: The line chart shows that quarterly tax due from standard rate disposals followed a similar seasonal trend to the weight of disposals shown in the previous chart. The tax due from lower rate disposals ranged between £0.3 million and £0.5 million each quarter. 

Source: Landfill Disposals Tax statistics by reporting period, tax rate and measure on StatsWales

[p] The values for October to December 2023 are provisional and will be revised in a future publication.

[r] The values for July to September 2023 have been revised in this publication.

Disposals in October to December 2023 resulted in £7.1 million of tax due. This is 28% lower than the same period in 2022. This trend was largely due to the 32% decrease in the weight of standard rate disposals over the same time period. The trends in weight of waste disposed and some possible reasons for this are described under Figure 1. 

There is evidence of a seasonal pattern in the data, with shorter days in winter months potentially a factor in the level of disposals. 

For October to December 2023, the 5 landfill site operators paying the most tax accounted for 94% of the total tax due. This is the highest quarterly percentage seen to date. In previous quarters, the figure varied between 80% and 90%. 

The relieved tax amount is not shown on the chart but has ranged from very little up to £0.3 million each quarter. This value was £0.2 million in October to December 2023.

Revisions to the weight of waste disposed and tax due for July to September 2023

As described in the Methods section of this release , our estimation processes result in provisional estimates for the latest quarter being routinely revised in the next edition of the statistical release. These revisions are often relatively small.

Compared with estimates published in our previous statistical release, we have revised the July to September 2023 data as follows:

• weight of waste disposed at the standard rate revised upwards from 72 thousand tonnes to 73 thousand tonnes.
• weight of waste disposed at the lower rate revised downwards from 144 thousand tonnes to 142 thousand tonnes.
• total tax due was revised upwards from £7.8 million to £7.9 million.

Figure 3: Weight of lower rate waste disposed to landfill, by type of waste and quarter

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Description of Figure 3: The line chart shows that in October to December 2023, the disposed weight of fines material is the second lowest quarterly figure seen to date. The weight disposed of soils and stones was slightly higher than in the same quarter a year earlier. The disposed weight of waste classified as ‘concrete, bricks, tiles and ceramics’ and ‘other lower rate’ was at a lower level than the two earlier categories mentioned, though the ‘other lower rate’ category has risen in each of the past 4 quarters.

Figure 4: Percentage of lower rate disposals of each waste type, by quarter

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Description of Figure 4: The bar chart shows that in October to December 2023, the percentage of lower rate weight accounted for by fines material was the lowest quarterly value seen to date, at just over a third. For soils and stones, the percentage was just under a third. For ‘other lower rate’, the percentage was the highest quarterly figure seen to date, at just over a quarter. 

Source: Landfill Disposals Tax statistics by reporting period, tax rate and measure on StatsWales

[Note 1] Fines are particles of material produced by a mechanical waste treatment process. Landfill site operators must ensure certain criteria are met for the material to be treated as qualifying fines at the lower rate of tax. Please see the glossary page for further information.

[Note 2] Data for these categories represents non-qualifying fines material, grouped by List of Waste (LoW) code. The groupings used for these three categories are presented in our glossary page.

[p] The values for October to December 2023 are provisional and will be revised in a future publication.

[r] The values for July to September 2023 have been revised in this publication.

Table 1 earlier in the release showed that in October to December 2023, 48 thousand tonnes of fines material was disposed at the lower rate of tax. This is 19% lower than the same period a year earlier. For the weight of soils and stones disposed at the lower rate of tax, there was a 10% increase from the same quarter a year earlier, to 43 thousand tonnes.

Figure 4 shows that since April 2021, the quarterly percentage of lower rate waste accounted for by fines material varied between 34% and 48%. The lowest and highest values were seen in October to December 2023, this quarter, and April to June 2021 respectively. 

Since April 2021, the quarterly percentage of lower rate waste accounted for by soils and stones varied from 19% to 42%. The lowest and highest values were seen in July to September 2023 and January to March 2022, respectively. The value in this quarter was 31%.

The percentage of lower rate disposals classified as ‘other’ generally rose from 3% in April to June 2021 to 26% this quarter. In future releases, we’ll continue to review whether we can provide more detail on this category if the percentage continues to rise.

With only several years of data so far, it is unclear if there will be any seasonal patterns in these percentages. We will continue to monitor this in future releases.

We previously received a request to break down data for lower rate fines material by List of Waste code. We then began publishing this table in the October to December 2022 edition of this release. In the releases since, we have updated these approximate percentages to include data for the most recent quarter, which resulted in no change to the percentages. We will continue updating these percentages in a similar way in future.

Receipts of LDT

We also publish quarterly receipts data for LDT on StatsWales. This data is based on the date the payment was received, sometimes referred to as ‘on a cash basis’. 

Landfill Disposals Tax statistics on tax paid, on StatsWales

These data usually differ slightly from the data on tax due. This is because the figures 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. Generally, figures for cash receipts broadly align with the total due for the previous quarter. Cash receipt data will:

• include very small amounts of penalties and interest paid relating to LDT 
• exclude any amounts of unpaid LDT, including penalties and interest. We manage any instances through our debt management processes.

Accounting adjustments made in a financial year different to that when the waste was disposed

In the spreadsheet published on the headline page, Table 3 contains details of adjustments made to reflect waste disposed in one year that was accounted for in a different year within the WRA financial accounts. This can happen when a taxpayer amendment to the disposals is notified by a landfill site operator. In some situations these amendments may be accepted, or lead to an enquiry, after which the amendment may be confirmed, rejected or reversed (if it had previously been accepted). All these scenarios might lead to accounting adjustments. The position may be further complicated by an appeal to the tribunal and a consequent further delay in accounting. Accounting adjustments may be made where there is uncertainty whether tax will eventually be due, ahead of the outcome of any appeal to the tribunal being determined.

In this edition of the release, we have updated the data in Table 3 of the spreadsheet to reflect how published statistics could be adjusted to match the 2022-23 WRA accounts.

Accounting adjustments made in a financial year different to that when the waste was disposed (Open Document Spreadsheet, 14 KB)

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Estimates for operators with non-standard 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

Image

The diagram shows a timeline of the previous return and latest return for Operators 1 and 2. Letters A, B and C denote parts of the previous and latest return for Operator 2 and how these are used in the calculation.

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

In our quality information, we describe how we introduced a new tax return from April 2021. In the new return, landfill site operators record any relieved waste and any water discounts in separate parts of the return. In this release, we combine these two categories to present a ‘relieved or discounted’ category. 

In the previous tax return, landfill site operators would initially record relieved waste as lower rate waste then subtract it off in a later part of their return. However, our previous releases would report relieved waste within the ‘relieved or discounted’ category but not as part of the lower rate category, so this has not led to a change in the presentation of data over time.

In our quality information, we have added new information on the reasons for differences between data from LDT returns and Natural Resources Wales data collection on input and output waste at permitted waste sites. This is relevant for relieved waste.

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.

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