finance bill 2002: EXPLANATORY NOTE
CLAUSE 119: LANDFILL TAX: RATE
SUMMARY
1. Clause 119 increases the standard rate of landfill tax from £12 to £13, with effect from 1 April 2002.
DETAILS OF THE CLAUSE
2. Subsection (1) substitutes ?£13? for ?£12? in section 42(1)(a) and (2) of the Finance Act 1996 (amount of landfill tax).
3. Subsection (2) provides for the change to take effect from 1 April 2002.
BACKGROUND
4. Landfill Tax came into force in October 1996. It encourages waste managers to switch to less environmentally damaging alternatives. The tax applies to active and inert waste, disposed of at a licensed landfill site. Active waste attracts the standard rate of tax, whilst inert waste is subject to a lower rate.
5. This increase was pre-announced in Budget 1999, when the Government announced a landfill tax ?escalator? to increase the standard rate of tax by an additional £1 per tonne each year, from April 2000. These increases were to take place at least until 2004 when the tax would again be reviewed.
6. The Government anticipates that the standard rate of landfill tax will need to be increased significantly in the medium term, beyond the current £1 per tonne escalator increase.
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