From 1 April, rogue operators handling waste illegally will have to pay landfill tax.
This builds on the extensive action the Environmental Agency is already taking to shut down these sites due to the harm they cause to the environment, by removing the financial incentive to set them up in the first place.
This will also ensure that honest businesses in the industry who pay the tax they owe are not disadvantaged by unfair competition.
Andrew Jones, Exchequer Secretary to the Treasury said:
Illegal waste sites are a blight on communities and undermine legitimate landfill operators. We have listened carefully to concerns raised by businesses and local communities and we are taking action to tackle this crime.
HMRC will be able to prosecute these illegal operators where necessary, who could face large fines and risk a sentence of up to 7 years in prison.
HMRCs Director General for Customer Strategy & Tax Design, Jim Harra, said:
These rules will go a long way to clamping down on the use of illegal waste sites, strengthening existing work in this area led by the Environment Agency. The impact of these illegal sites on landowners and the environment can be significant. By making the illegal disposal of waste taxable, we will deter the spread of this damaging activity by making it less profitable and reinforce the principle of the polluter pays.
We encourage businesses and individuals to send us their views to ensure that the legislation works as intended. The consultation period will be open for six weeks, closing on 25 October.
We estimate that there are currently around 600 illegal sites operating in England, Wales and Northern Ireland.
The Environment Agency already has the power to shut down illegal waste sites, due to the damage they cause to the environment. And they are already doing so. In 2016, they prosecuted 110 businesses and individuals for offenses related to illegal waste sites.
Landowners caught by this illegal activity who were unaware of it taking place will not be liable as a result of the changes. HMRC will issue guidance in due course.
Guidance on Landfill Tax is available on the HMRC website.
Other clauses that have been published today (13 September) make technical changes following consultation include:
- completing the legislation intended to crack down on the use of highly artificial disguised remuneration schemes by making clear how the rules apply to owners of small businesses
- providing clarity on tax paid by individuals who are running a business in partnership with someone else, to ensure they can get their tax affairs right the first time around
- legislating to close several loopholes in the anti-avoidance legislation, to prevent people from avoiding tax on money they withdraw from offshore trusts