Budget Notes

BN81 LANDFILL COMMUNITIES FUND

Who is likely to be affected?

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

General description of the measure

2. Secondary legislation will be introduced to amend 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, from 6.6 per cent to 6 per cent. This should result in an increase to the maximum value of the fund of £5 million to give a potential value of £70 million of credit claimable for 2008-09.

3. Legislation will be introduced in Finance Bill 2008 to transfer responsibility for decisions on whether to revoke the approval of an environmental body which fails to comply with its obligations from ENTRUST, the regulatory body, to the Commissioners of HM Revenue & Customs. These decisions by the Commissioners will be subject to their review and appeals system.

4. The period after which an environmental body must submit details of its income, expenditure and balances to the regulator, or the Commissioners if appropriate, will be extended from 14 to 28 days after either the end of the relevant period or a request being made. The relevant period is usually a 12 month period from 1 April to 31 March each year.

Operative date

5. The measure will have effect on and after 1 April 2008.

Current law and proposed revisions

6. A statutory instrument will be laid on 19 March 2008 to amend the maximum percentage claimable under the LCF set out in regulation 31(3) of the Landfill Tax Regulations 1996 ("the regulations").

7. Legislation will be included in Finance Bill 2008 to amend paragraph 53(4)(d) of the Finance Act 1996 to enable the withdrawal of the approval of an environmental body to be made by the Commissioners or the regulatory body. By statutory instrument to be laid on 19 March 2008, the regulations will be amended to transfer the power to revoke an environmental body that fails to comply with its obligations set out in regulation 33A(1) from the regulatory body to the Commissioners. The instrument will omit regulation 34(1)(e) of the regulations to remove the power from the regulatory body and insert a new paragraph in regulation 35 to confer the power on the Commissioners.

8. Legislation will be included in Finance Bill 2008 to insert a new paragraph in section 54(1) of the Finance Act 1996 to include a decision by the Commissioners to revoke the approval of an environmental body that fails to comply with the requirements of regulation 33A(1) of the regulations in the list of decisions that may be reviewed by the Commissioners. The review decision will be subject to appeal by virtue of section 55 of the Finance Act 1996.

9. A statutory instrument to be laid on 19 March 2008 will amend regulation 33A of the regulations to extend the period of time an environmental body has for submitting financial details to the regulator, or the Commissioners if appropriate, under paragraphs (1)(h), (ha) and (hb).

10. Information on the LCF is available from ENTRUST at www.entrust.org.uk

Further advice

11. If you have any questions about this change, please contact the National Advice Service on 0845 010 9000. Information about Budget measures is available on the HM Revenue & Customs website at www.hmrc.gov.uk