When waste becomes taxable: Unauthorised waste disposal and landfill tax

A recent tax tribunal decision has significant implications for both developers and landowners involved in site works/material movement and stockpiling.

Background

In John Jones v HMRC, a civil engineering firm was ordered to pay £547,000 in landfill tax plus £42,800 interest for waste unlawfully deposited on a farm. The waste remained in situ after a change in law on 1 April 2018, triggering tax liability - even though environmental regulations made removal difficult due to an invasive plant.
 
This case confirms that:

• Landfill tax applies to illegal waste disposal, even at unlicensed sites.
• Environmental complications (eg, invasive species, asbestos) do not exempt liability.
• Landowners permitting development may be exposed if waste is deposited unlawfully on their land (ie, without a permit or material management plan).
• Developers and contractors must ensure proper permitting and disposal routes to avoid cumulative penalties.

Key details

• Unlawful disposal: 410 truckloads of construction waste were dumped without a permit, causing environmental harm. The company was fined £50,000 in 2018.
• Tax law change: From 1 April 2018, landfill tax applies to waste at unauthorised sites if still present on that date. Unauthorised sites are those without a relevant permit/licence or material management plan.
• Environmental obstacles/exemption: The presence of invasive species (eg, Australian swamp stonecrop) did not excuse the company from tax liability.
• Limited recourse: Fairness arguments and public law claims were rejected; only statutory and technical grounds are viable.
• Dual penalties: clients may face both criminal fines and landfill tax - these are cumulative, not alternatives.
• Policy impact: The ruling strengthens environmental protection by deterring illegal stockpiling and reinforcing the “polluter pays” principle.

Summary

This case is a clear warning: illegal stockpiling/mismanagement of materials on site can result in substantial tax liabilities and fines, even years later. Environmental complications won’t shield operators or landowners from enforcement. Compliance with permitting and waste regulations is essential.

If your clients are dealing with any movement of materials on/around their land, please get in touch to our team of experts.

This is especially relevant for development contracts and stockpile/access agreements. We have dealt with numerous housebuilder and developer breaches over the last few years so it should not be assumed that parties are aware of the regulations.