The 12-month transitional period where the threshold for material content lost on ignition (LOI) is set at 15% comes to an end on 31st March 2016. From 1st April 2016, the LOI threshold will be lowered to 10% and only qualifying fines with an LOI of 10% or less will be eligible for the lower rate of landfill tax.
Having attended URocs “Fine Talk” Open Meeting on 4th March, the need for a middle rated LOI level of between 10 and 15% seems essential.
DETS have carried out trial testing and found that the standard deviation from 10% LOI gives test results of 8.8% to 11.2%. This is backed up by producers who have been splitting samples and sending them to two separate labs giving them 2% variability in the results produced.
In order to make improvements there is some scope to produce an accredited sampling procedure to give assurances of on-site testing procedures.
Although it is mandatory for laboratories to use the methodology prescribed by HMRC, further guidance regarding analytical equipment used in laboratories also seems necessary. For example, using a muffle furnace capable of 440°c with an accuracy of +/-10°c will increase confidence in the results, over those produced using a furnace with only +/-25°c accuracy.
LOI guidance was updated in December 2015; failure of notification forms must now be returned to the HMRC for all failed loads specifying the tonnage. See the following link for further details:
www.gov.uk/government/publications/excise-notice-lft1-a-general-guide-to-landfill-tax/excise-notice-lft1-a-general-guide-to-landfill-tax
Interestingly, in Scotland the LOI rate for qualifying fines will stay at 15% for the moment. It remains to be seen what issues this may cause from 1st April this year.
Verity Pilgrim
Compliance Manager Red Materials Ltd
