Landfill Tax Soars to £126.15 Starting 2025/26 Fiscal Year
8th March 2024
Landfill Tax Increase
In the latest budget announcement by Chancellor Jeremy Hunt, it has been confirmed that the standard rate of landfill tax will see a substantial increase to £126.15 per tonne in the 2025/26 fiscal year, with the lower rate also experiencing a hike to £4.05 per tonne.
Aim for Alignment
The decision to raise the standard rate by over 20% from 2025 aims to align the tax more closely with the Retail Price Index (RPI) and maintain its role in encouraging investments in sustainable waste management infrastructure.
Current Rates
The current landfill tax stands at £103.70 for the standard rate and £3.30 for the lower rate.
Significant Surge
This 21.6% surge in the standard rate, as confirmed in the spring budget, represents a significant leap, especially when compared to the previous year’s modest increase of £1.60 per tonne, despite the RPI rate exceeding 10%.
Anticipated Outcome
The anticipated outcome of this adjustment is an additional £50 million for the Treasury in the fiscal year 2025/26 and the subsequent two years. Subsequently, it is expected to taper down to an extra £45 million in 2028/29.
Sector Repercussions
While this increase in landfill tax is welcomed by a considerable portion of the waste sector, it will undoubtedly have repercussions. Local authorities like Cumbria and Essex, still reliant on landfill for waste disposal, will face a challenging 20% rise in disposal costs. Despite this, Essex is actively seeking alternatives to landfill through a contractor procurement process.
Transition for Energy-from-Waste Sector
For the energy-from-waste sector, this significant rise may expedite the transition away from landfill usage. The sector has already been grappling with elevated operating costs due to inflation, affecting expenses related to staff and materials like ammonia, essential for stack cleaning processes, which have experienced substantial cost increases.