Waste brokers might assume that Landfill Tax only applies to landfill site operators, so may not consider the subject of much relevance to them.
While it is true that the landfill site operator is liable for tax on disposals made at a landfill site, there are other complexities that can arise when non-landfill site disposals are considered that could impact waste brokers.
This is likely to occur when an unpermitted or exempt site is used.
A person becomes liable for Landfill Tax if they either:
- Make the disposal, or
- Knowingly cause or knowingly permit the disposal
Any person to whom the above applies will be jointly and severally liable.
This means that HMRC has the power to pursue any one party for the full amount, regardless of relative blame.
Waste brokers are firmly in the scope of Landfill Tax
Waste brokers need to be aware of the enhanced risk they face regarding Landfill Tax and take measures accordingly.
Specifically, brokers can be liable if they:
- Arrange the deal
- Help organise transport
- Are part of the contract
- Have any involvement in how the waste is disposed
A broker never needs to physically see or touch the waste to be caught liable.
The real trap for waste brokers
Any involvement in these operations poses a genuine trap for waste brokers that is difficult to get out of.
The law may assume that you “knowingly caused or permitted the disposal” based on your involvement in the disposal alone.
The only recourse at that point is to prove that you did not have knowledge of the exact disposal methods despite your due diligence being performed.
A reverse burden of proof can be a struggle for most brokers, resulting in varied outcomes.
How can waste brokers manage risk and mitigate liability?
Any wrongdoing will be assessed according to Section 41 of the Finance Act 1996.
Cases involving Section 41 are highly fact-specific, elevating the need for a burden of proof to determine:
- What you knew (or should have known)
- Whether anything looked suspicious (e.g. pricing)
- What checks you carried out
- What records you kept
Small differences in evidence can lead to very different outcomes, so rigorous record-keeping is vital for proving and maintaining compliance.
Given that liability is joint and several, HMRC will often use the ability to target any one party for the full amount and waste brokers are often selected to be the target.
As such, it should be noted that:
- Brokers are not just intermediaries under Section 41
- Brokers can be liable without direct involvement
- Everything turns on evidence, due diligence and documentation
Cases centre on what can be proven rather than what may or may not have happened in reality.
Seeking legal support can be vital for ensuring that your records are robust enough to reduce the risk of liability under Section 41.
Our specialist team can support you with compliance awareness so that you do not get caught out. Contact John Dyne today for help.