Finance Bill Tracking Service 2007 | Budget 2007 | Budget Notes

BN62 Landfill Communities Fund: increase in value and simplification package

Who is likely to be affected?

1   Businesses registered for landfill tax and environmental bodies (EBs) enrolled under the Landfill Communities Fund (LCF).

General description of the measures

2   The maximum credit that landfill site operators may claim against their annual landfill tax liability, for contributions made to bodies with objects concerned with the environment, enrolled under the LCF, will be changed from 6.7 per cent to 6.6 per cent. This should result in an increase in the value of the fund of 5m to a potential maximum of 65m for 2007-08.

3   The Commissioners of HM Revenue and Customs will be able to specify conditions under which the regulatory body for the LCF is and remains approved. Additionally, the regulatory body will be able to specify conditions under which an EB is and remains approved.

4   An EB will no longer have to submit a copy of its independently audited financial accounts to the regulatory body each year, unless it is requested to do so.

5   The relevant period for which an EB must submit details of its income, expenditure and balances will be standardised to a 12 month period ending on 31 March. An EB may be required to submit such information at other times at the request of the regulatory body.

6   Currently, when an EB transfers a contribution to another EB, both EBs have to notify the regulatory body. From 1 April 2007, the EB making the transfer will still have to notify the regulatory body but the EB receiving the transfer will no longer have to do so.

7   An EB will have to notify the regulatory body of project details in advance of spending on a project.

8   Contributions made by a landfill site operator before 1 April 2003 will no longer be qualifying contributions if they are spent on sustainable waste (object c and cc) projects unless there is a contract or documented record in place before 1 April 2007 committing those funds to such a project.

Operative date

9   The changes will have effect on and after 1 April 2007.

Current law and proposed revisions

10 A new paragraph will be inserted in section 53(4) of the Finance Act 1996 to allow the Commissioners and the regulatory body to specify conditions relating to approval. By statutory instrument laid on 22 March 2007, new paragraphs will be inserted in Regulations 34(1) and 35(1) of the Landfill Tax Regulations 1996 to enable the regulatory body and the Commissioners to specify the conditions under which and EB and the regulatory body respectively is and remains approved.

11 Regulation 31(3) of the Landfill Tax Regulations 1996 specifies the maximum percentage credit claimable under the LCF and will be amended by statutory instrument to be laid on 22 March 2007.

12 Regulation 33A of the Landfill Tax Regulations 1996 specifies the obligations of approved EBs and will be amended by statutory instrument laid on 22 March 2007.

13 Regulation 6 of the Landfill Tax (Amendment) Regulations 2003 allows contributions made before 1 April 2003 to be spent on objects relating to the management of waste, commonly referred to as the c and cc projects. This regulation will be revoked and a new regulation will be inserted by statutory instrument laid on 22 March 2007.

Further advice

14 If you are a business registered for landfill tax and you have any questions about this change, please contact the National Advice Service on 0845 010 9000. If you are an enrolled EB, please contact ENTRUST, the regulatory body for the LCF, on 0161 972 0074. Information about Budget measures is available on the HM Revenue & Customs website at www.hmrc.gov.uk