Landfill Tax Reform in England

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Briefing note on the RDF Industry Group response and government outcome

Purpose of this note

As an action from the RDF Industry Group Operations Working Group, this note has been prepared to provide a summary overview of the recent proposals to reform English Landfill Tax via consultation, the positions taken by the Group, the outcome following the consultation process, and an update on where the debate sits now.

This note summarises:

  1. the main proposals in the 2025 Landfill Tax consultation;
  2. the RDF Industry Group’s response;
  3. the government’s post-consultation decision; and
  4. the areas where the debate remains live.

This note relates to Landfill Tax in England. Landfill taxes are devolved in Scotland and Wales, and separate regimes apply in those jurisdictions.

1. Background: what government consulted on

In 2025, the government consulted on reforms to Landfill Tax in England. The consultation package was intended to support greater circularity, reduce opportunities for misdescription and non-compliance, and address waste crime risks associated with differential tax treatment.

The key proposals included:

  • transitioning to a single rate of Landfill Tax by 2030;
  • removing the Qualifying Fines Regime from April 2027;
  • removing the exemption for material disposed of in quarries operating under disposal permits;
  • removing other specific exemptions and discounts; and
  • increasing the rate applied to disposals at unauthorised waste sites.

The proposals were significant for RDF operators because changes to the tax treatment of fines, inert residues and lower-rate materials could affect sorting behaviour, RDF quality, treatment economics and the availability of lawful outlets for residual fractions.


2. RDF Industry Group position

In response to the UK Government’s Consultation on reform of Landfill Tax (2025), the RDF Industry Group did not oppose reform in principle. However, the Group’s response was clear that any reform would need to be deliverable in practice and sequenced properly against infrastructure, regulation and enforcement capacity.

The Group accepted that a move towards a single rate of Landfill Tax could be supported only if specific conditions were met and if the transition period was extended. The Group also opposed a cliff-edge removal of the Qualifying Fines Regime, arguing that lawful outlets must remain available for materials with no realistic diversion route.

The Group’s central position was that Landfill Tax reform should:

  • support genuinely circular outcomes;
  • avoid pushing material into misdescription or illegal routes;
  • preserve RDF quality;
  • avoid destabilising compliant operators; and
  • be accompanied by stronger enforcement against waste crime.

The Group’s position, in detail, is as follows:

Transition to a single rate of Landfill Tax

  • If a single rate is implemented, it should be introduced only on a longer phased timetable through to 2030. The lower-rate escalator and supporting guidance should be confirmed early, and any delay to the published timetable should trigger an automatic one-year extension.
  • If a single rate is pursued, implementation should be tied to regulatory and infrastructure readiness. Reform should not take effect ahead of available treatment capacity, cleared permitting backlogs, and operational alternative outlets for fines and inert residues.
  • If a single rate is pursued, reform should be sequenced alongside other major waste policy changes. Implementation should be aligned with Simpler Recycling, ETS-related waste measures and digital waste tracking so cumulative burdens do not destabilise compliant operators or feed through into wider cost pressures.

Improving circularity of lower-rate materials

  • If disposal incentives are tightened, clear end-of-waste criteria should be published first for washed fines, recycled sands, washed soils and secondary aggregates. Recovered inert outputs should have consistent legal and technical recognition, rather than relying on ad hoc determinations.
  • If circular outcomes are the objective, UK rules should align where possible with emerging EU end-of-waste standards. Recycled aggregates and fines should be classified against standards compatible with developing EU rules so secondary material markets remain investable and tradable.
  • If reform is intended to shift material into recovery, investment support should be front-loaded. Time-limited enhanced capital allowances, targeted grants or equivalent support should be made available for fines washing, inert treatment and associated infrastructure before disposal costs escalate.
  • If recovered outputs are expected to displace virgin materials, end markets should be actively supported. Public procurement should favour recycled aggregates in suitable applications, technical specifications should be updated, and certification routes should be strengthened. The competitive distortion created by a low Aggregates Levy on virgin material should also be addressed.

Practical and technological barriers

  • If alternative treatment routes are expected to absorb lower-rate materials, policy should recognise current physical and technical constraints. Site space, wash-plant footprint, water management, contaminant thresholds, and limited end markets should all be treated as live delivery constraints rather than assumed away.
  • If quarry recovery is expected to absorb displaced fines and soils, recovery permitting should be simplified and standardised. Government should map available and potential quarry capacity, clarify the recovery test, and apply equivalent scrutiny across recovery-permitted sites and landfill.

Materials with no realistic diversion route

  • If lower-rate reform proceeds, a narrow exception should remain for genuinely unavoidable inert materials. Heavily contaminated inert soils and certain low-grade C&D fines with no realistic recovery route should continue to have access to a lawful disposal outlet reflecting the absence of a technically feasible alternative.
  • If structural reform of the tax is revisited, a lower rate could still be retained at inert-only landfill sites. Simpler and more consistent waste streams at inert-only sites reduce the scope for concealed misdescription while preserving a compliant outlet for truly inert material.

Waste crime and misdescription

  • If a single rate is pursued, waste crime controls should be strengthened in parallel. Reform should be accompanied by tighter control of exemptions and recovery permits, stronger intelligence-sharing between local authorities, police and the Environment Agency, faster seizure powers, and tougher sanctions for repeat offenders.
  • If disposal costs rise sharply, enforcement funding should be ringfenced from the Landfill Tax uplift. Additional revenues should be directed into Environment Agency and local authority enforcement activity so that deterrence is real rather than nominal.
  • If visibility of high-risk flows is to improve, large handlers of inert fines and soils should face light-touch reporting requirements. A basic registration or reporting regime for large-volume handlers should improve transparency without duplicating existing permit obligations.
  • If compliance is to improve, technical guidance should be updated before reform takes effect. LOI testing, sampling, fines classification and compliant alternative outlets should all be covered in revised guidance, developed jointly by HMRC, the Environment Agency and industry.

Removal of the Qualifying Fines Regime

  • If the Qualifying Fines Regime is removed, removal should be phased through to 2030 rather than imposed as a cliff-edge change in 2027. At minimum, implementation should follow no less than 24 months’ notice.
  • If the regime is removed, reform should not take effect before replacement lawful outlets are available. Fines-washing infrastructure, recovery-permitted quarry routes, technical guidance and end-of-waste rules should all be in place first.
  • If the regime is removed, RDF quality should be protected as an explicit policy objective. Policy design should not incentivise retention of inert fines within RDF bales, nor create avoidable pressure on calorific value, ash content, grate performance or maintenance at EfW facilities.
  • If quarry recovery is expected to absorb displaced fines, government should address capacity and market concentration risk. National capacity should be mapped and transparency measures should be considered where constrained void space risks inflating gate fees or creating local monopoly conditions.

Government post-consultation response

Following the consultation, the government decided not to proceed with the proposed transition to a single rate of Landfill Tax by 2030.

At Budget 2025, the government confirmed that it would not move to a single-rate structure and would retain the exemption for quarries with disposal permits.

The practical effect is that the post-consultation position is no longer a move towards a single-rate Landfill Tax regime. Instead, government has retained the two-rate structure and preserved the quarry disposal-permit exemption, while still uprating Landfill Tax rates from 1 April 2026.

In its published summary of responses, the government said these decisions reflected widespread concern about the proposed reforms, including the pace of change, operational readiness, and potential unintended consequences. It also indicated that, because it was no longer taking forward some of the central consultation proposals, there was less immediate need for some of the mitigating measures that respondents had proposed alongside them.

Where the debate remains live

Although the most significant structural reforms have not been taken forward, the issue has not disappeared.

The government’s summary of responses indicates that HMRC will work with the landfill sector to reform the Qualifying Fines Regime, with any primary legislation to be introduced in a future Finance Bill. This means the treatment of qualifying fines remains a live policy area, even though the proposed cliff-edge removal from April 2027 is not proceeding in the form originally consulted on.

The government has also said it will monitor the impact of the lower rate alongside the development of alternative waste management solutions and wider regulatory changes intended to promote more efficient resource use.

For the RDF Industry Group, the main areas to monitor are therefore:

  • any future HMRC proposals to reform the Qualifying Fines Regime;
  • whether technical guidance on fines classification, LOI testing and sampling is updated;
  • whether government revisits lower-rate reform once alternative treatment capacity develops;
  • whether quarry recovery and disposal routes face further scrutiny;
  • whether waste crime enforcement is strengthened in practice;
  • interaction with wider reforms, including digital waste tracking, Simpler Recycling and ETS-related waste measures; and
  • any indirect impact on RDF quality, composition and export specifications.

The Group’s consultation response remains relevant because many of the underlying issues are unresolved. In particular, the need for clear end-of-waste rules, sufficient treatment capacity, robust enforcement and protection of RDF quality will continue to apply to any future reform of lower-rate materials or qualifying fines.