Both concern attempts to qualify for exemptions to the tax. The first was a successful appeal by Taylor Woodrow against Customs and Excise’s refusal to grant an exemption for waste that did not need to be removed for development to continue (Taylor Woodrow Construction Northern Ltd vs The Commissioners of Customs and Excise).
The second, unsuccessful, case was brought by contractor FL Gamble & Sons, which wanted an exemption for waste that was cleaned and reused to restore the landfill site.
You win some …
In the first case, Taylor Woodrow won a contract to build a Tesco superstore on an illicit domestic waste tip near Bury in Greater Manchester. The local council had taken capping measures, but mounds of waste had been deposited on the site more recently.
Following a geotechnical survey and discussions with the Environment Agency, a scheme of treatment, capping and disposal was agreed. Customs agreed to the exemption certificate for 10 800 tonnes of waste. Work on the site duly began on 7 October 1996.
Customs visited the site on 4 December 1996 and discovered that 2800 tonnes of recently deposited waste had been removed. On 13 January 1997, it wrote to Taylor Woodrow to say that this did not qualify for the tax exemption, and that the certificate was only provisional.
Taylor Woodrow replied on 31 January 1997, challenging Customs’ views on the mounds that had been removed. After more to-ing and fro-ing between Customs and Taylor Woodrow, the case came up for consideration at the end of last year.
As long as it makes development easier, the developer or contractor can remove as much contaminated waste as it wants
According to Lovell White Durrant solicitor Greg Sinfield, who represented Taylor Woodrow, Customs argued that the 2800 tonnes was contaminated, but that it could have been left on the site and capped or treated. “It only wanted waste to be removed if absolutely necessary for development,” says Sinfield.
Sinfield argued that, in accordance with the wording of the relevant legislation – section 43 of the Finance Act 1996 – an exemption was valid so long as it was carried out with the “object of facilitating development”. So, Taylor Woodrow’s side argued, if it makes development easier, the developer or contractor can remove as much contaminated waste as it wants. The VAT tribunal agreed, and so Taylor Woodrow did not have to pay landfill tax on the 2800 tonnes of waste.
As the landfill tax is levied at the rate of £7 per tonne, the tribunal’s decision saved Taylor Woodrow £19 600. This decision may have implications for town centre developments on contaminated sites that have been blocked because the extra cost of landfill tax made them unviable.
… you lose some
The second important case is that of general contractor FL Gamble & Sons. The contractor disposed of waste material at a landfill site and paid the operator a tipping fee.
Waste was stockpiled at the site and then processed to produce soil, which was subsequently converted into clay. This was used to cover the tip.
Gamble claimed that the waste was not disposed of by way of landfill because, at the end of the process, it was not deposited on the surface of the land in a contaminated form. The VAT tribunal, however, ruled that the initial stockpiling of waste on the site was itself taxable deposit, and the later treatment of the waste did not affect the fact that a taxable disposal had already taken place.
