SLfT6001 - Claims for credit

SLfT6001 - Introduction

The guidance, reflecting the provisions of Parts 4 to 6 of The Scottish Landfill Tax (Administration) Regulations 2015, covers claims for credit in relation to: bad debt relief; recycling, incineration or re-use of material; and enforceable removal of material.

It does not cover:

  • claims for credit in relation to the Scottish Landfill Communities Fund -  see SLfT7001; and
  • claims that are not made in the form of a tax return (that is, a claim made under section 106, 107 or 108 of the RSTPA 2014 – see RSTP7001.]
  • Revenue Scotland will not reimburse Tax Payer who have outstanding liabilities 

SLfT6002 - Bad debt relief 

The guidance for credit in relation to bad debt relief is structured as follows:

SLfT6003 - Entitlement to bad debt relief

SLfT guidance on determining a landfill operator’s entitlement to credit for bad debt relief.

If a customer of yours becomes insolvent then you (a registered landfill operator) may claim bad debt relief if you meet all of the following conditions:

LT(S)A 2014 sections 18-19

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 19

SLfT6004 - Records required for a claim for bad debt relief

SLfT guidance on the records that a landfill operator must have before making a claim for bad debt relief, and records that must be kept after the claim.

Before you can make a claim for bad debt relief you must have the following records:

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 21

Once you have made the claim, you must make a record of that claim and keep it in a single account (with other such records) known as a ‘landfill tax bad debt account’. Each record should contain the following information in respect of each claim made:

See SLfT6007 for the repayment consequences of failing to comply with this requirement.

You may also be liable to a penalty (see RSTP3002) if you fail to keep and preserve these records as required (see SLfT8002).

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 22

SLfT6005 - Determining the amount of a claim for bad debt relief

SLfT guidance on determining the amount of credit that can be claimed in relation to bad debt relief, including attributing payment and writing off debts.

You can normally claim credit for the amount of SLfT you charged on the disposal relating to the bad debt.

However, you must offset against the amount of the bad debt:

  • any amount that you owe the customer (a mutual debt);
  • the value of any enforceable security that you have in relation to that customer.

‘Security’ in this context means:

  • in relation to Scotland, any security (whether heritable or moveable), any floating charge and any right of lien or preference and right of retention (other than a right of compensation or set-off);
  • in relation to England, Wales and Northern Ireland, any mortgage, charge, lien or other security;

and

  • any part payment made by the customer for the debt.

In any or all of the above cases, your claim to credit can only be for the same proportion of SLfT that the outstanding bad debt forms of the whole consideration for the disposal.

For example:

total charge for disposal - £182.50 (including £82.50 SLfT which has been paid);

payment received - £90;

amount of debt - £92.50;

bad debt relief claimable - proportion x amount of SLfT owed on disposal

bad debt relief claimable - (amount of debt/total charge for disposal) x amount of SLfT owed on disposal bad debt relief claimable - (amount of debt/total charge for disposal) x amount of SLfT owed on disposal

The Scottish Landfill Tax (Administration) Regulations 2015 regulations 18, 20 and 25

Attribution of payments

If you have more than one debt with your customer (including debts relating to non-taxable or non-waste transactions) and your customer makes a payment to you, this payment should be attributed firstly to the oldest debt, then to the next oldest debt if there is a remainder, and so on.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 23

Writing off debts

The whole or any part of the consideration for a taxable activity shall be taken to have been written off as a bad debt where any of the following apply:

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 25

SLfT6006 - How to claim bad debt relief

SLfT guidance on how to make a claim for credit for bad debt relief.

Before claiming credit for bad debt relief you should first make sure you:

Claiming bad debt relief in your SLfT return

You can claim credit for bad debt relief once you have written of the debt by including the amount of credit you are claiming in the ‘Credit for Bad Debt claimed’ section of the relevant SLfT return. Separate guidance is available on How to make a SLfT return and pay Scottish Landfill tax.  
  
The relevant SLfT return is the one that includes the first anniversary of the date of issue of the landfill invoice which has given rise to the bad debt.

Where the total credit you claim exceeds the total tax due for the accounting period, we will repay you an amount equal to the excess.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 15

Claiming bad debt relief if you are no longer registered for SLfT

If you are no longer registered with us for SLfT purposes (because we have cancelled your registration), you should make your claim for credit for bad debt relief by writing to us (clearly marking the letter Claim for Bad Debt Relief) at the contact email address provided on our website, and including:

Assuming you have complied with the above requirements, and we are satisfied that you are entitled to credit (and have not previously had the benefit of that credit), we will pay you an amount equal to the credit. We will not make such a payment to you if you have failed to make all the SLfT returns you were required to make.

Where the total credit you claim exceeds the total tax due for the accounting period, we will repay you an amount equal to the excess.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 16

SLfT6007 - Repayment of credit for bad debt relief

SLfT guidance on the circumstances in which a landfill operator must repay credit to Revenue Scotland after it has been claimed.

Repayment following receipt of a payment from a customer after a successful claim for bad debt relief

If you have claimed credit for bad debt relief and you subsequently receive any payment from your customer (or a payment is treated as attributed to the relevant disposal – see SLfT6005), you will have to repay us some or all of the credit.

The amount that you have to repay is calculated as the credit claimed, multiplied by a fraction, of which:

Using the example in SLfT6005:

Repayment following failure to comply with record keeping related requirements

If you have claimed credit for bad debt relief and you subsequently:

 then you will have to repay us the amount of the claim to which the failure to comply relates.

SLfT6008 - Credit for landfill waste permanently removed etc.

Overview of SLfT guidance on claims for credit in relation to landfill waste later removed for recycling, incineration or re-use or enforceably removed.

A claim for credit can be made where you have been registered for SLfT, have accounted and paid tax for a particular accounting period and either of the two following conditions is satisfied in relation to the disposal on which the tax was charged:

SLfT6009 - Credit for waste later removed for re-use etc.

The guidance for credit in relation to landfill waste which is later removed for recycling, incineration or re-use is structured as follows:

SLfT6010 - Conditions of credit claims for waste re-used etc.

SLfT guidance on conditions a landfill operator must meet for a claim for credit in relation to waste later removed for recycling, incineration or re-use.

You can claim credit for landfilled waste which is temporarily disposed of but later removed for recycling, incineration or re-use (whichever applies) where each of conditions A to D below are satisfied.

Condition A: You made the disposal with the intention at the time that the material comprised in it would later be:

Condition B: That material, or some of it, has been recycled, incinerated or re-used (whichever applies) in accordance with the intention mentioned in condition A.

Condition C: The recycling, incineration or re-use:

Condition D: Before the disposal you notify us by writing at the contact email address provided on our website that you intend to make one or more removals of material in relation to which conditions A to C above will be satisfied.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 17

SLfT6011 - Records for credit claims for waste re-used etc

SLfT guidance on the removal account a landfill operator must keep for a claim in relation to waste later removed for recycling, incineration or re-use.

As evidence for your claim, you should keep a removal account for wastes permanently removed showing, for each removal, and cross-referenced to the original disposal and the original tax paid:

If you fail to keep and preserve these records as required (see SLfT8002) you may be liable to a penalty (see RSTP3002).

SLfT6012 - Determining credit amount for waste re-used etc

The amount of credit is equal to the tax that you originally accounted for and paid in relation to the original disposal at your site (see SLfT2002). Where only some of the material in that disposal is removed, the amount of credit is the same proportion of that tax as the material removed forms of the total material.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 17

SLfT6013 - Making a claim for credit for waste re-used etc.

SLfT guidance on how to make a claim for credit in relation to waste later removed for recycling, incineration or re-use.

To claim credit for landfill waste that is later removed for recycling, incineration or re-use you should first make sure you meet the conditions in SLfT6010 and have the required information detailed in SLfT6011.

Claiming credit for landfill waste later removed for recycling, incineration or re-use in your SLfT return

You can claim credit for landfill waste that is later removed for recycling, incineration or re-use, by including the amount of credit you are claiming in the ‘Credit for permanent removals claimed’ section of the relevant SLfT return.

Separate guidance is available on How to make a SLfT return and pay Scottish Landfill tax.

Where the total credit you claim exceeds the total tax due for the accounting period, we will repay you an amount equal to the excess.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 15

Claiming credit for landfill waste later removed for recycling, incineration or re-use if you are no longer registered for SLfT

If you are no longer registered with us for SLfT purposes (because we have cancelled your registration), you should make your claim for credit for landfill waste that is later removed for recycling, incineration or re-use by writing to us (clearly marking the letter ‘Claim for credit in relation to Scottish Landfill Tax’) at the contact email address provided on our website, and including:

Assuming you have complied with the above requirements, and we are satisfied that you are entitled to credit (and have not previously had the benefit of that credit), we will pay you an amount equal to the credit.  We will not make such a payment to you if you have failed to make all the SLfT returns you were required to make.

Where the total credit you claim exceeds the total tax due for the accounting period, we will repay you an amount equal to the excess.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 16

SLfT6014 - Credit for waste enforceably removed to another landfill site

The guidance for credit in relation to landfill waste which is later enforceably removed to another landfill site is structured as follows:

 

SLfT6015 - Credit conditions for waste enforceably removed

If you (a registered landfill operator) accept waste at your site and then have to remove it to another landfill site you can claim a credit of the tax you accounted for and paid on the original disposal at your site, if you meet all of the following conditions:

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 17

SLfT6016 - Records for credit for waste enforceably removed

As evidence for your claim, you should keep the following records:

  • a copy of the correspondence from SEPA in which you are directed to remove the waste because its presence breaches the conditions of your permit or authorisation; and
  • a removal account for wastes permanently removed showing, for each removal, and cross-referenced to the original disposal and the original tax paid:
    • the weight of waste removed;
    • the waste description and EWC Code; and
    • the date of removal;

If you fail to keep and preserve these records as required (see SLfT8002) you may be liable to a penalty (see RSTP3002).

SLfT6017 - Determining the amount of a claim for credit

SLfT guidance on determining the amount of credit a landfill operator can claim in relation to waste later enforceably removed to another site.

The amount of credit is equal to the tax that was charged on the disposal (see SLfT2002). Where only some of the material in the disposal is removed the amount of credit due is a proportion of the tax previously paid.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 17

SLfT6018 - How to claim for credit for waste enforceably removed to another landfill site

To claim credit for waste that is later enforceably removed to another landfill site you should you should first make sure you meet the conditions in SLfT6015 and have the required information detailed in SLfT6016.

Claiming credit for landfill waste enforceably removed to another landfill site in your SLfT return

You can claim credit for landfill waste that is later enforceably removed to another landfill site by including the amount of credit you are claiming in the ‘Credit for permanent removals claimed’ section of the relevant SLfT return.

Separate guidance is available on How to make a SLfT return and pay Scottish Landfill tax.

Where the total credit you have claimed exceeds the total tax due for the accounting period, we will repay you an amount equal to the excess.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 15

Claiming credit for landfill waste enforceably removed to another landfill site if you are no longer registered for SLfT

If you are not registered with us as a registrable person for SLfT purposes (because we have cancelled your registration), you should make your claim for credit for landfill waste that is later enforceably removed to another landfill site by writing to us (clearly marking the letter ‘Claim for credit in relation to Scottish Landfill Tax’) at the contact email address provided on our website, and including:

Assuming you have complied with the above requirements, and we are satisfied that you are entitled to credit (and have not previously had the benefit of that credit), we will pay you an amount equal to the credit.  We will not make such a payment to you if you have failed to make all the SLfT returns you were required to make.

Where the total credit claimed by yourself exceeds the total tax due for the accounting period, we will repay you an amount equal to the excess.

The Scottish Landfill Tax (Administration) Regulations 2015 regulation 1

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