SLfT2006 - Qualifying materials containing a small amount of non-qualifying material

SLfT2006 - Qualifying materials containing a small amount of non-qualifying material

Note: the following ‘General guidance’ applies for SLfT purposes to all waste loads which wholly consist of qualifying material apart from a small amount of non-qualifying material.

In this context:

• ‘qualifying material’ means material which is listed in and meets the conditions set out in The Scottish Landfill Tax (Qualifying Material) Order 2015; and
• ‘non-qualifying material’ means material which is not listed (and does not meet the conditions set out) in that Order and which is, therefore, chargeable at the standard rate.

If the waste load contains fine material then in addition to the 'General guidance', the guidance under the ‘Qualifying fines’ heading also applies.

If the waste load consists of soils then in addition to the 'General guidance’, the guidance under the ‘Waste soils’ heading also applies.

General guidance

We may direct that material disposed of can be treated as qualifying material if it would so qualify but for the presence of a small amount of non-qualifying material.

We are aware that some waste streams, which may otherwise be liable for tax at the lower rate, may arise with small amounts of non-qualifying (or standard-rated) materials contained within them as contaminants. This includes fines and contaminated soils, which generally contain a mixture of qualifying and non-qualifying materials, and which make the whole load liable for tax at the standard rate.

Where:

• it is unreasonable to have prevented this contamination at source; and
• it is subsequently unreasonable, or there is no practical way, for these contaminants to be removed,

then the whole load may be taxable at the lower rate. Any load which is hazardous waste as defined by Directive 2008/98/EC (see SLfT2004) must, however, be taxed at the standard rate.

Material of a standard taxable rate must not be added to material of a lower rate. For example, it must not have been deliberately or artificially blended or added to the qualifying material(s) after or in connection with removal from its originating site. Such an addition would make the entire load taxable at the standard rate. The only exceptions to this are when:

• standard-rated material needs to be used to contain the lower-rated waste; or
• standard and lower-rated material at a Materials Recycling Facility are mixed prior to treatment to enable their treatment and segregation.

In cases of doubt the waste will be taxed at the standard rate unless you can demonstrate that the waste qualifies for the lower rate of tax and that all reasonable and practical measures have been taken to remove contaminants contained within the waste.

The lower rate of tax may only be applied to a load containing a small amount of standard-rated material if the standard rate material was formed with the lower-rated waste at the same time, or it is used as necessary packaging and all reasonable and practical measures have been taken to prevent, reduce and remove the standard-rated material from the lower-rated material.

For example, we would accept the following as qualifying for the lower rate:

• a load of bricks, stone and concrete from the demolition of a building that has small pieces of wood in it and small quantities of plaster attached to bricks as it would have not been feasible for a contractor to separate them. (Note: large pieces of wood or plaster which could be removed by hand or other means would make the entire load taxable at the standard rate);
• a load of sub-soil that contains small quantities of grass. (Note: turfs of grass which could have been removed prior to the load of sub-soil being created would make the entire load taxable at the standard rate);
• waste such as mineral dust packaged in polythene bags for disposal; and
• a load of sub-soil and stone from street works containing small amounts of tarmac (Note: large pieces of tarmac which could be removed by hand or other means would make the entire load taxable at the standard rate).

It is not possible for us to advise you on every disposal. It is your responsibility to decide whether a particular load disposed of at your site contains any standard-rated material.

If it does contain such waste you need to satisfy yourself that the load:

• is not hazardous waste; and
• contains only a small quantity of non-hazardous non-qualifying (or standard-rated) waste, which was formed with the lower-rated material and either could not be removed or is necessary for packaging reasons.

The difficulty in separating the standard-rated components from the lower-rated waste is a factor that you can take into account, but this cannot be used to justify applying the lower rate of tax if the standard-rated waste is hazardous or it is more than a small amount of the total load. You will need to justify your decisions to us.

LT(S)A 2014 section 14

Waste Fines

From the 1 October 2015, under this direction made under section 14 of the LT(S)A 2014 we will require you to apply the following legislative guidance in order to determine whether a load consisting of waste fines only, is chargeable at the standard or lower rate of SLfT when disposed of to landfill.

For the purposes of SLfT, fines are particles produced by a waste treatment process that involves an element of mechanical treatment. Qualifying fines are:

• fines that consist of materials listed in the Schedule to The Scottish Landfill Tax (Qualifying Material) Order 2015; and
• contain no more than a small amount of any other (i.e. non-qualifying) material; and
• do not result from any deliberate or artificial blending or mixing of any material prior to disposal at a landfill site
• have been shredded only as part of a pre-conditioning process of the waste prior to its treatment
• are not classified as hazardous under WM3 classification

Flowchart for determining the rate of SLfT chargeable per load of waste fines

All of the conditions of the qualifying fines flow chart must be met in order for each load of waste fines to be liable at the lower rate of SLfT.

WM3 Classification

As part of their duty of care, waste producers must classify the waste that their business produces and WM3 is the current UK standard that they must use. (See: Technical Guidance WM3: Guidance on the Classification and assessment of waste)

In order for the lower rate of SLfT to apply to the load of fines, it must not be classed as hazardous waste under WM3. The person disposing of the waste  should be asked to provide evidence of the non-hazardous classification of the load under WM3. You should review this evidence and be satisfied that it appears to be a true and accurate assessment. A copy of this evidence should be retained by you to support the lower rate of SLfT applied to the load.

Loss On Ignition (LOI) Test for Fines

An LOI test determines the organic content of material. The difference in the mass of the tested material before and after the ignition process is used to calculate the LOI result. The LOI result will inform whether the waste is liable at the lower rate of SLfT, but is not the only determining factor. For fines to be classified as qualifying for the lower rate, they must give an LOI result of 15% or under.

Prescribed Test

Making a Representative Sample

The sample of fines you send for testing must be representative of the whole load or stockpile. To take a representative sample the following methodology applies:

• the sample must be taken from across the whole load or stockpile of waste fines i.e. top, middle and bottom
• a composite (master) sample must be produced from a mix of sub-samples taken from at least 6 different places across the whole quantity of fines
• the sub-samples must be selected at random
• the sub-samples must be thoroughly mixed to ensure that a representative 1kg composite sample is sent for testing

LOI Test Methodology

You must arrange to undertake the LOI test prescribed below for SLfT purposes:

Sample preparation

• dry the 1 kg sample at a temperature of between 30° C and 50° C, until a constant weight is achieved
• cone and divide the 1kg sample to select a 200g sub-sample
• remove material, exceeding 20 mm that conforms to Group 1 and Group 2 of the Scottish Landfill Tax (Qualifying Material) Order 2015 from the sub-sample. Record the weight of the sub-sample and of the removed material
• grind the remaining part of the sub-sample to a particle size of 2mm or less to produce a homogenous sample. Any material not passing the 2mm sieve must be added back into the ground sample and the combined sample mixed and homogenised

This prepared sample should be retained in the event that a retest is necessary.

Sample treatment

• take a minimum of 5g of the homogenous ground sample and place in a dried, weighed dish and weigh
• dry in an oven at 180° C to a constant weight, cooling in a desiccator for a minimum of 45 minutes
• record the weight
• transfer the sample to a muffle furnace at a temperature of 440° C for a minimum of 5 hours
• cool in a desiccator as before and reweigh

LOI calculation

Calculate the loss on ignition between 180° C to 440° C as a percentage of the dried material taking into account the mass of removed Group 1 and Group 2 material and any weight loss during the initial drying process.

What if a Tested Sample Is Above the LOI Threshold?

Actions to take if a sample is above the LOI threshold:

• You must declare the quantity of fines to Revenue Scotland and pay tax on it at the standard rate of Scottish Landfill Tax until the waste stream tests below the LOI threshold of 15% on five successive occasions.
• You may need to increase the frequency of testing of subsequent loads to be certain they qualify for the lower rate of SLfT.
• You must notify Revenue Scotland of the test result, providing all the requested details on the Loss on Ignition Test Result Form.

Loss on Ignition Test Result Form

A Loss on Ignition Test Result Form must be completed each time a sample gives a loss on ignition  test result of over 15%. You should submit all completed forms with the SLfT return for the period in which the test(s) took place and no later than 44 days after the end of the quarterly accounting period  in which the test took place.

Loss On Ignition Test Result Form.pdf

Please read the notes below before you complete the Loss on Ignition Test Result Form, and include all the information required.

Operator details

Please provide details of the Landfill Site Operator including the Scottish Landfill Tax registration number, name, address of site and contact telephone number of the person signing the Loss on Ignition Test Result Form declaration.

Sample date and location

Please provide the date the sample was taken from the load or stockpile of waste fines, as well as the details of the specific landfill site or other location the sample was obtained from.

Test date

Please provide the date the LOI test was undertaken.

Test carried out by

Please provide the details of the organisation that conducted the LOI test.

Test result (LOI %)

Please provide a copy of the original LOI test result percentage and report supplied by the laboratory e.g. a copy of the  test certificate or laboratory report.

Waste producer details

Please provide details of the waste producer including name, address, type of facility and contact number.

Details of the waste stream

Please provide details of the waste stream from which the non-qualifying fines originated from, including the 6 digit European Waste Code (EWC) and geographic origin.

Action carried out for results above the threshold

Please provide details of what action has been taken as a result of the quantity of fines having exceeded the LOI threshold.

Can a sample be retested that is above the LOI threshold?

If the prescribed test is conducted and the result is above the LOI threshold, you may conduct a single retest provided the following conditions are met:

1. the original prepared 200g sub-sample of fines must be retested.
2. the first LOI result must be no more than 0.5% above the LOI threshold.
3. the prescribed retest must be conducted before the end of the same tax quarter as the original test.

In such circumstances, if the retest result is within the LOI threshold, you may treat this as the test result for determining liability to SLfT.

Power to direct a test

Where we consider it necessary for the protection of the revenue against mistake or fraud, we can direct that a representative sample of fines is taken and sent for testing at your cost. In such circumstances, the results of that test may be used to determine the liability to Scottish landfill tax.

What records must I keep for qualifying fines?

You may need to justify your decision to us. You must therefore keep and provide sufficient evidence to substantiate applying the lower rate of SLfT to any particular disposal of waste fines. 

You must make and preserve records to show that fines disposed of at your landfill site were qualifying fines, for a period of 5 years. This could include waste transfer notes, evidence the material is not classified as hazardous waste under WM3, LOI test results and evidence of visual inspections.

In cases of doubt tax will be charged at the standard rate for each load of waste fines unless you can demonstrate that it qualifies for the lower rate of SLfT.

Waste soil

Note: From 1 October 2015, under this direction made under section 14 of the LT(S)A 2014, we will require you to use the flowchart in this section in order to determine whether a load consisting of waste soils only, is chargeable at the standard or lower rate of SLfT when disposed of to landfill.

General Guidance for Soil

For the purposes of SLfT, soil is a qualifying material if it wholly consists of naturally occurring sub-soil as listed in Group 1 of the Schedule notes to The Scottish Landfill Tax (Qualifying Material) Order 2015.

In practice, even virgin sub-soil is likely to be found to contain other materials when subjected to testing and unless these are also listed as qualifying materials and the criteria set out in the Order are met, the whole load will be subject to the standard rate of tax when disposed of to landfill.

The only exception to this is where the amount of non-qualifying material contained in the soil is small and we have directed that the whole load may be charged at the lower rate of tax. This section of guidance explains the process we will expect you to follow from 1 October 2015 to determine the correct rate of tax chargeable on such loads.

WM3:

As part of their duty of care, waste producers must classify the waste that their business produces and WM3 is the current UK standard that they must use. (See: Technical Guidance WM3: Guidance on the Classification and assessment of waste.)

In order for lower rate SLfT to apply to the load of soil, it must not be classed as hazardous waste under WM3. The person disposing of the waste should be asked to provide evidence of the non-hazardous classification of the load under WM3. You should review the evidence provided and be satisfied that it appears to be a true and accurate assessment. You must retain a copy of this evidence  and make it available to us if we ask to see it to support the rate of SLfT declared in your tax return.

Flowchart for determining the rate of SLfT chargeable per load of waste soil. (Applies from 1 October 2015)