Housebuilders are challenging proposals to scrap the lower rate of landfill tax, which they claim would amount to a 30-fold increase in the cost of disposing of topsoil.
Industry figures have described the Treasury’s consultation on plans to ditch the lower rate of £4.05 a tonne for less polluting materials such as topsoil as ‘catastrophic’.
They argue the changes would hamper the government’s target of building 1.5m homes by the end of this parliament, 2029.
Homebuilders Federation executive director David O’Learysaid the viability of new housing delivery had been affected by a swathe of new development and additional policy costs by government.
“The proposed 3000 per cent increase in landfill tax would threaten the viability of even more projects, leading to fewer affordable homes and reducing supply overall.
“We are urging the Government to think again about this tax that would make its ambitious housing target even more difficult to achieve.”
Increase in SMEs exiting housebuilding if new tax regime goes ahead
Brokers Hank Zarihs Associates said development finance lenders were concerned that if the new single standard rate was adopted, SME housebuilders would leave the sector.
A treasury spokesperson said: “The consultation on landfill tax reform is still open, no decisions have been made. We are committed to working with businesses to understand the impacts of the proposals.”
The treasury embarked on a consultation to reform landfill tax as the current two-rate design had resulted in misdescription of waste leading to significant non-compliance.
The treasury consultation started on the 28thof April and closes on the 21st of July with publication cleared by Number 10 Downing Street. Key changes include a single standard rate by 2030 with the removal of qualifying fines regime and quarry infill exemptions by April 2027.
Landfill tax was introduced in 1996 to encourage companies to reduce waste and promote recyclingwith levies increasing in April.
The standard rateis now £126.15 a tonne with a lower tariff of £4.05 with certain sectors exempt or benefiting from discounts.Some 6.9 million tonnes were levied at the lower rate and 7.5 million tonnes were deemed exempt.
It’s estimated that if all the lower rate landfill tax was raised to the standard levy, then this would add £840m to the amount the treasury collects.
LinkedIn Question: What alternatives are there for disposing of topsoil on a building when building a housing project?
