Recycled waste used at landfill site for landscaping purposes — Whether use amounting to deposit of waste at landfill site — Whether use amounting to taxable disposal under section 40(1) of Finance Act 1996
The appellant was a landfill site operator and majority shareholder in a recycling plant that accepted and processed waste. Recyclable waste from the plant was sold, while landfill waste was deposited at the appellant’s site. Tax on the landfill waste was paid to the respondent. Following the accounting periods 1998 and 1999, the respondent charged the appellant £30,000 in landfill tax, plus interest, in respect of recycled waste that the appellant had purchased from the plant to use for roads and landscaping at the landfill site.
The appellant challenged that decision, arguing that, before tax could be charged, it would have to have made a taxable disposal of the material as waste, as described in section 40 of the Finance Act 1996. It claimed that this could only have taken place if the conditions found in section 40(2) had been satisfied, and the disposal had not been “of material as waste” as set out in section 40(2)(a). The definition of waste in section 64(1) made it clear that it was the intention with which material was discarded that defined it as waste, and, since the appellant was not disposing of but utilising the material, it maintained that it could not be waste.
The respondent claimed that section 40(2)(a) was satisfied at the point when the waste materials were deposited at the recycling plant; that is, when they were discarded by the local council as waste. It argued that it was not necessary for the same disposal to fulfil all the conditions; thus, it did not matter that the waste was originally disposed of by the council, nor was it relevant whether it was the appellant or the recycling plant that delivered the recycled waste materials to the appellant’s premises.
Held: The appeal was allowed.
Landfill tax was to be construed against the background of its purpose to reduce the environmental effects of waste disposal. To tax recycled material used in road-making and the like at landfill sites would be contrary to the promotion of recycling and reducing the amount of waste going to landfill.
The tax was to be paid on waste material that had been disposed of as landfill in a landfill site, not on waste material that had been recycled. The conversion of waste into a useful product did not necessitate some chemical change in the product; it was the act of recycling itself that was important. This was the cumulative effect of section 40(2), and it could not have been the intention of parliament to tax deposits at landfill sites of useful material produced from waste material.
The crux of the matter was the intention of the disposer. The tax was designed to levy a charge upon the person who discarded material as waste, not upon the person who recycled the waste and returned it to a useable material.
David Milne QC and Richard Barlow (instructed by Nabarro Nathanson) appeared for the appellant; Philip Havers QC and Philippa Whipple (instructed by the solicitor to Customs & Excise) appeared for the respondent.
Vivienne Lane, barrister
