EDITOR'S NOTE: Since the following article was written, the Landfill Tax Credit Scheme has been replaced by the Landfill Communities Fund. The regulatory body for the fund is Entrust.
Landfill Tax Environmental Credit Scheme
Since 1996 landfill operators have had to charge Landfill Tax on waste
deposited on their sites. To the great surprise of Customs and Excise,
who had to implement the new tax, the landfill operators were allowed
by the Government to make regular donations to a variety of approved 'environmental'
bodies for certain types of projects in lieu of handing the tax over to
Customs and Excise. As well as supporting the protection of the natural
environment, projects were allowed to benefit where they supported the
'protection, maintenance, repair, restoration of a building or other
structure which is a place for religious worship or of historical or architectural
interest, open to the public and situated in the vicinity of a landfill
Miniscule requirements for eligibility opened the door for a tidal wave
of applications which have benefited churches and cathedrals throughout
the UK, the sums realised being either one-off payments of a few hundred
to a hundred thousand pounds, or a continuous series of payments as work
In the year 2000 the total tax raised by the landfill operators was about
£84 million, of which approximately £7.1 million went towards the costs
of restoring and repairing churches, chapels and buildings of architectural
or historic interest.
THE MATCH FUNDING REQUIREMENT
qualify for funding under the Landfill Tax Credit Scheme, there has to
be a degree of match funding by a third party. The requirement is a little
complex. The landfill operator can credit the Landfill Tax due to Customs
and Excise with 90 per cent of a donation to an enrolled 'environmental'
body (such as a church), but that credit has to be a maximum of 20 per
cent of the tax due. For example:
Landfill Tax due to Customs
Credit claimed @ 20% by landfill operator
Net paid to Customs by landfill operator
As only 90% of
the landfill operator's donation can come from the credit,
actual donation made is £2,222 (credit x 100/90):
Donation by landfill operator to good cause
The shortfall (in this case £222) may be carried by the landfill operator,
but all landfill operators (in the experience of the author) expect to
be recompensed for the amount. Under the rules, this element of the funding
has to come from a third party. It cannot be paid by the beneficiary.
OTHER KEY POINTS
- Landfill operators are under no obligation to give any donation.
- Although there is no requirement for funding to come from the landfill
operator of the site which is nearby, many operators will only donate
to buildings in the vicinity of their own site.
- Where third party funding is to be obtained, applications made to
different organisations must address the specific funding criteria of
- Organisations should find a donor to make a commitment before registering
in case they are unable to gain funding from the landfill tax operators,
wasting their £100 registration fee.
At present 31 per cent of tax credits goes to recycling waste. In the
2001 budget, the Chancellor expressed a wish that this should be increased.
Since then an 'indicative target' of 65 per cent of landfill tax credits
has been allocated to sustainable waste management projects, with a third
of tax credits within this category allocated specifically to recycling
projects (House of Commons Hansard Written Answers for 10 May 2001). No
reduction in the amount available for historic buildings and churches
has been suggested, but we will need to keep an eye on future Budget reports.
enrol as an environmental body contact:
Entrust Tel 0161 972 0044
For a list of landfill operators in the UK contact:
Customs and Excise Tel 0845 0109000
article is reproduced from The Building Conservation Directory, 2001
FRANCIS J GOLDEN is a former Customs and Excise Senior Executive Officer. He advises
on VAT on works to listed buildings and on applications under the Landfill
Tax Credit Scheme.
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