Reform to landfill tax could make projects unviable, warns FCC Environment
FCC Environment, one of the UK’s leading recycling and waste management companies, has written to the Chancellor of the Exchequer warning that proposed reforms to the landfill tax regime could make nationally significant infrastructure projects and major housing projects unviable.
In a letter to the Chancellor, FCC Environment raised concerns about the proposed move to a new single, flat rate of landfill tax. The company warned that the reforms could see a tax rise of almost 3,000% for developers and major construction firms. Under the current scheme, the removal of 1,000 tonnes of unusable or recyclable soil from a building site costs the developer, or the waste producer, £4,000. Under the new proposals, this could increase to as much as £126,000.
To put this in perspective, HS2 still must excavate 3,500,000 tonnes of soils, the majority of which are unsuitable for reuse. The additional tax burden will increase the project’s landfill tax fee exponentially seeing the current cost of £13,000,000 going up to over £440,000,000. FCC Environment also believes it could cost an additional £1.26 billion on development projects in London alone.
Julie Fourcade, Head of External Affairs at FCC Environment said: “At a time when the cost of doing business has increased dramatically amid global economic uncertainty, we are extremely worried that these proposed changes will massively drive up the cost of construction. These reforms will undoubtedly make some of our most important infrastructure projects and much needed housing developments become unviable for developers – putting the governments housing targets and economic growth plan at risk.”
FCC Environment has also raised concerns that the proposed removal of the landfill tax exemption for material disposed in UK quarries by 2027 is likely to undermine plans to restore old quarries back into productive land assets, as well as a potential increase in illegal dumping.
Julie added: “We’re unconvinced that this tax change will reduce waste crime as the government believes. In fact, the proposals will simply make the returns higher for those criminals’ intent on making money whatever the cost. Unless the Environment Agency (EA) and HMRC have the teeth and the teams to actually close illegitimate operators down at pace, nothing will change except all the tax will be lost to the taxpayer.”
The government launched a public consultation on landfill tax reform in April, with the deadline for submissions ending this week. Originally introduced in 1996, landfill tax is designed to encourage the diversion of waste away from landfill towards more environmentally friendly waste management, such as recycling.