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Narrowing of Historic English Landfill Tax Exceptions

04 May 2021

A recent decision in the Court of Appeal (Commissioners for HM Customs Excise v Biffa and Others and the linked case of Commissioners for HM Customs Excise v Biffa [2021] EWCA Civ 584) has probably brought to an end any prospect of recovery of historical claims by local authorities against landfill site operators for potentially significant overpaid landfill tax.


For some time landfill site operators have been using black bin bag waste for the purposes of lining the landfill cells, as the lining (or 'fluff' as it is known) provided additional protection, at the  bottom, sides and top of the cells, against breaches in the various outer membranes.  A second linked case was also heard in respect of waste that had been shredded and used for top cover.  This was known as waste that was 'engineered into the void permanently' or EVP for short.

The dispute, with HMRC, centred around whether the 'fluff' or EVP should attract landfill tax. The various landfill site operators said it shouldn't and HMRC said it should.

The critical issue in both cases was the interpretation of sections 64 and 65 of the Finance Act 1996.  Essentially, did the use of the waste, as fluff or EVP, negate the landfill operators' otherwise obvious intention to discard that waste?

Whilst the original claim related to overpaid landfill tax up to 2013, the Court also noted that various prescribed activities had been designated as landfill site activity and treated as disposal, with effect from 1 September 2009.  Thereafter the use of material placed against the drainage bottom or side of the cell to prevent damage is such a prescribed landfill activity. Biffa and the others accepted that fluff (at the bottom and up the sides) from September 2009 was taxable.  That left two questions: firstly was it taxable before then; and secondly, whether fluff or EVP placed at the top of the cell was subject to tax in the same manner, however, it was not necessary to answer these questions.

The only matters for consideration were whether the landfill site operator was the relevant disposer and whether their use of the waste negated their intention of discarding the material.


When considering who is the relevant disposer and what their intention was at that time, various factors may need to be weighed up, depending on the circumstances of the case. These include (non-exhaustively):

  1. whether it is being placed somewhere within the perimeter of the landfill site but not being placed in the cell; 
  2. whether it is processed in some way by or on behalf of the Landfill Site Operator; 
  3. whether it is separated out from the main body of waste and stored for a time or conversely whether it is placed in the cell immediately or soon after it arrives at the landfill site; 
  4. whether it is put into the cell with the expectation that it will stay there permanently; 
  5. whether there has been a passage of title to the disposer; and 
  6. the economic circumstances surrounding the acquisition of the materials in question – who paid whom for the material and whether the disposer would need to buy in alternative material if there was not enough of the material in dispute.

It was accepted that considering these factors does not lead to "once waste always waste heresy". However, all three judges concurred that the FTT (in both the "fluff" and the EVP cases) were right to step back from the semantics of whether an activity could properly be described as a ‘use’ and then whether such a ‘use’ negated an intention to ‘discard’ and to simply ask the statutory question. That is, not whether the landfill site operators used the fluff or the EVP, but whether they disposed of it as waste because they disposed of it with the intention of discarding it.


The case will no doubt be of interest to a number of local authorities that have been waiting in the wings to see if they were due a refund from their respective landfill contractors, in respect of potentially overpaid landfill tax.

There are rumours that the decision could yet be appealed to the Supreme Court.  However, it isn't clear if this is just the EVP element or both EVP and fluff matters.  In the latter respect there may be more of a technical argument and that may yet fall on the right side of the line.

Ultimately though local authorities may need to wait a little longer to understand whether they still have a claim or not.

If you are a public body considering how the issues in this article may affect you, please contact a member of our UK public sector team to discuss how we might assist you.

Further Reading