Upper Tribunal Tax and Chancery Chamber

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

Fecha: 17-Dic-2024

Relevant legislation

Relevant legislation

21.

The relevant legislation can be set out quite briefly. All references are to the provisions in force during the period of the assessment, from 1 July 2015 to 30 June 2018.

22.

Section 40 FA 1996 provides for a charge to landfill tax on a taxable disposal. A taxable disposal is a disposal of material as waste by way of landfill at a landfill site. Section 42(1) provides for the rate of landfill tax charged on a taxable disposal. During the relevant period the rate increased from £84.40 to £88.95 per tonne disposed of. Section 42(2) provides for a reduced rate of tax where the material disposed of consists entirely of qualifying material. The reduced rate has also increased over the period from £2.65 to £2.80 per tonne disposed. At the beginning of the relevant period, section 42 was in the following terms:

42 Amount of tax

(1)

The amount of tax charged on a taxable disposal shall be found by taking —

(a)

£84.40 for each whole tonne disposed of and a proportionately reduced sum for any additional part of a tonne,or

(b)

a proportionately reduced sum if less than a tonne is disposed of.

(2)

Where the material disposed of consists entirely of qualifying material or qualifying finesthis section applies as if the reference to £84.40 were to £2.65.

(3)

Qualifying material is material for the time being listed for the purposes of this section in an order.

(4)

The Treasury must —

(a)

set criteria to be considered in determining from time to time what material is to be listed or what fines are to be qualifying fines,

(b)

keep those criteria under review, and

(c)

revise them whenever they consider they should be revised.

(5)

The Commissioners must publish the criteria (and any revised criteria) set by the Treasury.

(6)

In determining from time to time what material is to be listed, or what fines are to

be qualifying fines,the Treasury must have regard to —

(a)

the criteria (or revised criteria) published under subsection (5), and

(b)

any other factors they consider relevant.

23.

Section 63 FA 1996 makes further provisions in relation to qualifying material:

63 Qualifying material: special provisions

(1)

This section applies for the purposes of section 42 above.

(2)

The Commissioners may direct that where material is disposed of it must be treated as qualifying material if it would in fact be such material but for a small quantity of non-qualifying material; and whether a quantity of non-qualifying material is small must be determined in accordance with the terms of the direction.

(3)

The Commissioners may at the request of a person direct that where there is a disposal in respect of which he is liable to pay tax the material disposed of must be treated as qualifying material if it would in fact be such material but for a small quantity of non-qualifying material …

24.

The relevant Order for the purposes of section 42(3) is The Landfill Tax (Qualifying Material) Order 2011 (“the QMO”). The QMO recites that the Treasury has set criteria for determining what material is to be listed as qualifying material, HMRC have published those criteria and the Treasury has had regard to those criteria and other factors they consider to be relevant in making the QMO. The QMO revoked and replaced a previous order from 1996. The QMO provides as follows:

Subject to articles 4 to 6, the material listed in column 2 of the Schedule to this Order (“the

Schedule”) is qualifying material for the purpose of section 42 of the Finance Act 1996.

The Schedule shall be construed in accordance with the notes contained in it.

25.

The Schedule then provides as follows:

Column 1	Column 2	Column 3
Group	Description of material	Conditions
…	…	…
6	Low activity inorganic compounds

Notes
…
(9)
Group 6 comprises only —
(a)
calcium based reaction wastes from titanium dioxide production;
(b)
calcium carbonate;
(c)
magnesium carbonate;
(d)
magnesium oxide;
(e)
magnesium hydroxide;
(f)
iron oxide;
(g)
ferric hydroxide;
(h)
aluminium oxide;
(i)
aluminium hydroxide;
(j)
zirconium dioxide.

26.

We describe below the criteria set by the Treasury pursuant to section 42(4) in determining what material is to be listed as qualifying material. Those criteria were published by HMRC pursuant to section 42(5) in HMRC Brief 08/11.