Explanatory note

These Regulations, which come into force on 1st January 2000, amend the Landfill Tax Regulations 1996 (“the Regulations”) to provide a number of changes to the scheme whereby landfill site operators are entitled to credit based upon the contributions they give to approved bodies with objects concerned with the environment. The details of this scheme are to be found in Part VII of the Regulations “Credit: bodies concerned with the environment”.

Regulation 3 provides for the insertion of a definition of “contributing third party” in regulation 30 “Interpretation and general provisions” as a person who makes or agrees to make a payment to a landfill site operator to secure a qualifying contribution by that operator.

Regulation 4 provides for amendments to regulation 31 “Entitlement to credit”, which determines when a landfill site operator can claim tax credits and how he should calculate his entitlement to credit. The amendment to regulation 31(2) changes the rule whereby a registered operator can claim credit in a landfill tax return for an earlier accounting period to allow such entitlements to be possible for all earlier accounting periods, and not just the last periods of contribution years. The amendments to regulation 31(4), 31(5) and 31(6) allow a landfill site operator to elect to vary his contribution year (the period according to which the maximum entitlement to credit is calculated), within certain limits. The notice of such an election must be made in writing by the operator to the Commissioners before it can come into effect and he cannot make another election until 24 months have elapsed.

Regulation 5 makes changes to take account of contributing third parties within regulation 32 “Qualifying contributions”. Amendments to regulation 32(1) and 32(2) impose additional requirements for a payment to become a qualifying contribution. These include: that a payment is not repaid to a contributing third party in the same accounting period as it was made; that a landfill site operator must record details of the contributing third party and the payment, and also provide those details to the regulatory body; that the operator informs the approved body of the third party contributor. Additionally an amendment to regulation 32(3)(b) confirms that the original contributing landfill site operator is treated as the contributor when qualifying contributions are transferred from one approved body to another.

Regulation 6 provides for a number of amendments to regulation 33 “Bodies eligible for approval” to further restrict the category of bodies that is eligible for approval. The first (to regulation 33(1)(e)) precludes a third party contributor from directly benefiting from his contributions. Also, certain persons must not control the body, and some of these must not be concerned in its management either. The persons thus disqualified are listed in new paragraphs (1A) and (1B). The former includes the existing disqualified persons, and adds persons connected with them. In addition, the body must pay an application fee of up to £100 to the regulatory body.

There is also a new category of approved object (new paragraph (2)(cc)), which is the promotion of the development of products from waste and markets for recycled waste. The definitions of “waste management practices” in paragraph (5), the promotion of which is an approved object under paragraph (2)(c), is extended to include recycling. Finally, further types of statutory agreement which give rise to obligations to carry out environmental projects are added (so that these are not approved objects).

Regulation 7 provides for the insertion of a new regulation 33A “Obligations of approved bodies”. The regulation requires that a body which has been approved must comply with certain requirements, including: continue to meet the requirements of regulation 33; spend qualifying contributions only on approved objects; certain record-keeping requirements; inform the regulatory body of a qualifying contribution or a transfer of qualifying contributions within 7 days; provide the regulatory body with access to its records; periodically submit to the regulatory body details of its funding and expenditure. In addition, an approved body must pay up to 5 per cent of qualifying contributions towards the running costs of the regulatory body.

Regulation 8 provides, through amendment to regulation 34(1) “Functions of the regulatory body”, that the regulatory body shall approve a body eligible under regulation 33 and revoke approval of a body that applies for revocation. The regulatory body also has a discretion to revoke approval of a body for breach of a requirement of regulation 33A. The amendment further requires the regulatory body to inform landfill site operators of details of transfers of qualifying contributions to which those operators contributed.

Regulation 9 makes certain stylistic changes to regulation 35 “Functions of the Commissioners”, as well as restricting the Commissioners' power to impose conditions on the regulatory body and revoke their approval of it.

Regulation 10 provides, through amendment to regulation 36 “Repayment of credit”, that the landfill site operator must repay credit he has claimed where the qualifying contribution on which it was based is repaid to a contributing third party.