Water discounts

Information on water discounts for landfill operators and waste producers

These FAQs are aimed at landfill operators and waste producers who are dissatisfied with a Revenue Scotland decision against approving an application for water discounting (or a qualified approval) in relation to the Scottish Landfill Tax (SLfT), and are considering entering into a dispute with Revenue Scotland.

These FAQs should be read alongside our Dispute Resolution Factsheet: Water Discounting, our published guidance on SLfT and water discount and our published guidance on dispute resolution.

What is water discount?

Water that is added to waste for transportation, extraction of minerals, or as part of an industrial process may be discounted in the calculation of the weight of the material for the purposes of calculating the tax due, subject to conditions and approval. For further information on water discounts, please see our general guidance.

What is Revenue Scotland’s role in relation to water discount?

Revenue Scotland is the tax authority responsible for the administration of Scotland’s devolved taxes, including the Scottish Landfill Tax (SLfT). SLfT replaced the UK Landfill Tax (LfT) in April 2015. Prior to this, waste producers could apply to HMRC for water discount approval under LfT, but Scottish waste producers must now apply to Revenue Scotland in order to receive water discount in relation to SLfT. Further information on the application process, the transitional arrangements which applied and Revenue Scotland’s approach is available on our website.

Why does the landfill operator receive the approval for water discount?

Approval to apply a water discount is given to the landfill operator as the registered taxpayer. The waste producer does not pay SLfT.  Landfill operators will seek to cover their costs in setting their prices, so these will generally include an element broadly equivalent to the tax charge that the operator faces. It follows that, where a water discount for SLfT applies, the landfill operator will usually charge a lower price for the disposal than if such a discount did not apply. This makes the waste producer the ultimate beneficiary of an approved water discount. For this reason, the application process is designed to allow the waste producer to apply direct to Revenue Scotland with the consent of the operator of the relevant site(s). Once approved, the landfill operator may apply the water discount within the specified terms.

I am a landfill operator – what are the dispute resolution options available to me if I am dissatisfied with Revenue Scotland’s decision on an application for water discount?

A landfill operator dissatisfied with this type of decision has the right to three possible dispute resolution options: Requesting Revenue Scotland carry out a review of the decision; requesting to enter into mediation with Revenue Scotland; and making an appeal to the Scottish Tribunals in relation to the decision. Further information about these dispute resolution methods and how to pursue them is available in our Dispute Resolution Factsheet: Water Discounting, Dispute Resolution Factsheet: Review and Dispute Resolution Factsheet: Mediation and in our published guidance on dispute resolution.

I am a waste producer – what are the dispute resolution options available to me if I am dissatisfied with Revenue Scotland’s decision on an application for water discount?

A waste producer may request Revenue Scotland review the decision, seek to enter into mediation with Revenue Scotland or make an appeal to the Scottish Tribunals in relation to the decision. Revenue Scotland will conduct a review and will consider mediation requests from waste producers on the same terms as those from landfill operators. In the case of making an appeal to the Scottish Tribunals, it will be for the Tribunal to decide whether such an appeal would be heard. Further information is available in our Dispute Resolution Factsheet: Water Discounting, Dispute Resolution Factsheet: Review, and Dispute Resolution Factsheet: Mediation and in our published guidance on dispute resolution. Information on the Scottish Tribunals is available on their website.  

Is there a difference between disputes raised by landfill operators and those raised by waste producers ?

As set out at question 3 above, approval for water discount, when granted, is given to the landfill operator as the registered taxpayer. The waste producer does not pay SLfT. Part 11 of the Revenue Scotland and Tax Powers Act (RSTPA) 2014 sets out the rights of taxpayers in relation to reviews and appeals. Revenue Scotland will consider requests for reviews and mediation from waste producers on the same basis as those from landfill operators. In the case of appeals to the Scottish Tribunals, it would be for the Tribunal to decide whether it had the competence and jurisdiction to hear an appeal direct from a waste producer, in the context of the rights set out in the Revenue Scotland and Tax Powers Act 2014.

Where can I find further information?

Further information on SLfT, water discount and dispute resolution is available at the links included above, and more general information on Revenue Scotland is available on our website.

You can contact our support desk. Alternatively, you can write to us or send an email to our dedicated SLfT mailbox at slft@revenue.scot.

Last updated: 
18 July 2017

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