UT (Tax & Chancery) UT/2023/000101 - [2025] UKUT 00072 (TCC)

This is an appeal against a decision of the First-tier Tribunal (Tax Chamber) (“the FTT”) released on 11 July 2023. The issue before the FTT concerned the rate at which landfill tax was payable on waste disposed of at a landfill site operated by the first appellant, Singleton Birch Limited (“Singleton Birch”). The waste was sent to landfill by the second appellant, FCC Recycling (UK) Limited (“FCC”) which is a waste management company.

The relevant waste, described as the “FCC Waste”, was produced by FCC. It was produced by mixing two other forms of waste, namely ferrous chloride solution and air pollution control residue (“APCR”). Ferrous chloride is a hazardous acidic waste, produced in the manufacture of titanium dioxide. APCR is a hazardous alkali waste produced in the treatment of acidic gases arising from the incineration of other waste materials in “energy from waste” facilities. The acidic gases are treated with hydrated lime to neutralise them. Hydrated lime is a chemical reagent containing calcium hydroxide. The resulting APCR contains unused calcium hydroxide which makes it a hazardous alkali waste. When the acidic ferrous chloride is mixed with the alkaline APCR, both are neutralised. The resulting FCC Waste is neutral and non-hazardous.

The issue for the FTT was whether the FCC Waste was entirely a “qualifying material” for the purposes of section 42(2) Finance Act 1996 (“FA 1996”). If so it would be charged to tax at a much reduced rate compared to other waste materials disposed of at landfill sites. Qualifying materials are defined by the Landfill Tax (Qualifying Material) Order 2011. One of the qualifying materials is defined by Note 9(a) in the Schedule to that Order as:

The issue before the FTT was whether the FCC Waste fell within this definition. Singleton Birch had accounted for tax at the lower rate on the basis that the FCC Waste was a qualifying material. HMRC decided that the FCC Waste was not a qualifying material and assessed Singleton Birch to tax in the sum of £8,726,716 for the period 1 July 2015 to 30 June 2018. Both appellants appealed against the assessment. The FTT held that the FCC Waste was not a qualifying material and dismissed both appeals.

The FTT gave permission to appeal on three grounds which we address in detail below. Essentially, the appellants say that the FTT erred in law in construing section 42(2) and Note 9(a) and in finding that the FCC Waste did not consist entirely of a qualifying material within the terms of Note 9(a).