The UK Landfill Communities Fund (LCF) is a tax credit scheme that enables operators of landfill sites to contribute money to enrolled Environmental Bodies to carry out projects that meet environmental objectives. The Scottish Government has committed to establishing a replacement for the landfill communities fund, replacing the UK fund from 1 April 2015 onwards. The new scheme will maintain the private status of contributions, facilitating the ability of projects to receive match funding from public and European sources.
The maximum tax credit a Scottish landfill operator will be able to claim under the fund has been set at 5.6% of their Scottish Landfill Tax liability. However, this may change from year to year as announced in the Scottish Budget and agreed by the Scottish Parliament. There will also be transitional arrangements for a two year period as the UK LCF runs down in Scotland.
Projects will be able to apply for monies from the Fund later in 2015, and will apply to Approved Bodies. The list of Approved Bodies is published by SEPA on their website.
At least 88% of landfill operators contributions to the fund goes to projects. Under Regulation 29(12) of the Scottish Landfill Tax (Administration) Regulations 2015 Approved Bodies can use up to 10% of each contribution to support the costs they incur in administration and monitoring of projects. While Regulation 30(1) of the Scottish Landfill Tax (Administration) Regulations 2015 provides for Approved Bodies to pay up to 5% of each contribution to the regulatory body (SEPA) towards the running costs of regulating the fund, this subvention percentage has been set at 1.82%.