SLfT2006 - Qualifying materials containing a small amount of non-qualifying material

Note: the following ‘General guidance’ applies for SLfT purposes to all waste loads which wholly consist of qualifying material apart from a small amount of non-qualifying material.

In this context:

• ‘qualifying material’ means material which is listed in and meets the conditions set out in The Scottish Landfill Tax (Qualifying Material) Order 2016; and
• ‘non-qualifying material’ means material which is not listed (and does not meet the conditions set out) in that Order and which is, therefore, chargeable at the standard rate.

If the waste load contains fine material then in addition to the 'General guidance', the guidance under the ‘Qualifying fines’ heading also applies.

If the waste load consists of soils then in addition to the 'General guidance’, the guidance under the ‘Waste soils’ heading also applies.

General guidance

We may direct that material disposed of can be treated as qualifying material if it would so qualify but for the presence of a small amount of non-qualifying material.

We are aware that some waste streams, which may otherwise be liable for tax at the lower rate, may arise with small amounts of non-qualifying (or standard-rated) materials contained within them as contaminants. This includes fines and contaminated soils, which generally contain a mixture of qualifying and non-qualifying materials, and which make the whole load liable for tax at the standard rate.

Where:

• it is unreasonable to have prevented this contamination at source; and
• it is subsequently unreasonable, or there is no practical way, for these contaminants to be removed,

then the whole load may be taxable at the lower rate. Any load which is hazardous waste as defined by Directive 2008/98/EC (see SLfT2004) must, however, be taxed at the standard rate.

Material of a standard taxable rate must not be added to material of a lower rate. For example, it must not have been deliberately or artificially blended or added to the qualifying material(s) after or in connection with removal from its originating site. Such an addition would make the entire load taxable at the standard rate. The only exceptions to this are when:

• standard-rated material needs to be used to contain the lower-rated waste; or
• standard and lower-rated material at a Materials Recycling Facility are mixed prior to treatment to enable their treatment and segregation.

In cases of doubt the waste will be taxed at the standard rate unless you can demonstrate that the waste qualifies for the lower rate of tax and that all reasonable and practical measures have been taken to remove contaminants contained within the waste.

The lower rate of tax may only be applied to a load containing a small amount of standard-rated material if the standard rate material was formed with the lower-rated waste at the same time, or it is used as necessary packaging and all reasonable and practical measures have been taken to prevent, reduce and remove the standard-rated material from the lower-rated material.

For example, we would accept the following as qualifying for the lower rate:

• a load of bricks, stone and concrete from the demolition of a building that has small pieces of wood in it and small quantities of plaster attached to bricks as it would have not been feasible for a contractor to separate them. (Note: large pieces of wood or plaster which could be removed by hand or other means would make the entire load taxable at the standard rate);
• a load of sub-soil that contains small quantities of grass. (Note: turfs of grass which could have been removed prior to the load of sub-soil being created would make the entire load taxable at the standard rate);
• waste such as mineral dust packaged in polythene bags for disposal; and
• a load of sub-soil and stone from street works containing small amounts of tarmac (Note: large pieces of tarmac which could be removed by hand or other means would make the entire load taxable at the standard rate).

It is not possible for us to advise you on every disposal. It is your responsibility to decide whether a particular load disposed of at your site contains any standard-rated material.

If it does contain such waste you need to satisfy yourself that the load:

• is not hazardous waste; and
• contains only a small quantity of non-hazardous non-qualifying (or standard-rated) waste, which was formed with the lower-rated material and either could not be removed or is necessary for packaging reasons.

The difficulty in separating the standard-rated components from the lower-rated waste is a factor that you can take into account, but this cannot be used to justify applying the lower rate of tax if the standard-rated waste is hazardous or it is more than a small amount of the total load. You will need to justify your decisions to us.

LT(S)A 2014 section 14

Waste Fines

From the 1 October 2016, the Scottish Landfill Tax (Qualifying Material) Order 2016 requires the application of the following legislative guidance in order to determine whether a load consisting of waste fines is chargeable at the standard or lower rate of SLfT when disposed of to landfill.

Contents

1. Waste Fines

2. Flowchart for determining the rate of SLfT chargeable per load of waste fines

3. What evidence must I keep for qualifying fines?

4. WM3 Classification

5. Pre-Acceptance Checks

6. Loss on Ignition (LoI) Test for Fines

7. Prescribed Test

8. LoI Test Methodology

9. What if a Tested Sample Is Above the LoI Threshold?

10. Loss on Ignition Test Result Form

11. Can a sample be retested that is above the LoI threshold?

12. Frequency of Testing

13. Power to direct a test

1. Waste Fines

Fines are defined in the Qualifying Material Order 2016 to be fractions of material produced by a waste treatment process that involves an element of mechanical treatment.

Qualifying fines, which are chargeable at the lower rate of SLfT, are defined in the Qualifying Material Order 2016 to be either:

• Fines that consist entirely of qualifying material, or

• Fines that consist entirely of qualifying material but for a small quantity of non-qualifying material

1.1 Entirely qualifying waste fines

Where waste fines comprise entirely of materials listed in the Qualifying Material Order 2016, the first load of the material you receive must be subjected to LoI testing following the prescribed methodology [section 7]. The waste stream must return a LoI test result of 10% or less in order to qualify for the lower rate of SLfT. You are only required to test the waste stream again if you have any reason to think the waste stream has changed and is no longer entirely qualifying material.

The description of the waste on the waste transfer note must adequately identify that the waste consists of wholly qualifying fines. You should also issue a pre-acceptance questionnaire and declaration for completion by the waste producer that produces fines for disposal at your landfill site as detailed in section 5 below, and you should require the waste producer to notify you of any change to the waste stream that would cause its classification to vary.

1.2 Qualifying fines with a small amount of non –qualifying material

In order to qualify for the lower rate, qualifying waste fines that contain a small amount of non-qualifying material must meet the conditions set out in this guidance (see in particular the flowchart at section 2); otherwise they are liable to the standard rate of SLfT.

Waste fines that originate from a waste producer that accept both non-qualifying and qualifying mixed waste inputs may qualify for the lower rate of SLfT, if the material has been subjected to a satisfactory treatment process. Such a treatment process could occur either before the mixed waste has been subjected to the mechanical process that produces fines or alternatively the process could involve the further separation of the fines after they have been produced.

The treatment process and evidence in support of the lower rate must demonstrate that either way the qualifying waste fines material have been separated from the non-qualifying material as much as reasonably possible. This treatment process must be detailed in the pre-acceptance questionnaire.

An example of the types of treatment process that could produce qualifying fines may include:

• the waste producer runs two separate lines, one for mixed waste from which the fines are not qualifying and are Standard Rated; and one for mainly qualifying waste with some non-qualifying material, from which the fines may be qualifying fines
• the waste producer produces fines through their treatment process from mixed waste sources but then subjects it to a further fines treatment process which can remove the majority of the non-qualifying material to leave qualifying fines
• However, if a waste producer shreds mixed municipal waste and subjects it to a basic treatment process, with no initial or further separation of non-qualifying material the waste would not be qualifying fines at this stage of processing.

Waste fines cannot qualify for the lower rate of SLfT if:

1. They result from any deliberate or artificial blending or mixing of any material before disposal at a landfill site.

2. If they are the output of a waste producer who accepts mixed waste inputs and they have not been subjected to any kind of satisfactory treatment process which separates out non-qualifying from qualifying material before disposal.

3. It contains non-qualifying material that could reasonably have been removed.

1.3 Fines produced by Landfill Operators

A landfill operator who produces their own waste fines on-site before disposing of them to landfill is considered to be a waste producer for the purposes of this guidance. A landfill operator is therefore required to carry out the same processes outlined below for fines they produce themselves as they are with fines produced elsewhere (i.e. by a separate waste producer).

2. Flowchart for determining the rate of SLfT chargeable per load of waste fines

All of the conditions of the qualifying fines flow chart and the Scottish Landfill Tax (Qualifying Material) Order 2016 must be met for each load of qualifying waste fines containing a small amount of non-qualifying material to be liable at the lower rate of SLfT. 

Flow Chart.pdf

3. What evidence must I keep for qualifying fines?

You are responsible for ensuring that you accurately declare the amount of SLfT due on waste disposed at your landfill site. You may need to justify your decision to classify waste fines as qualifying for the lower rate of SLfT to us. You must therefore keep and provide sufficient evidence to substantiate applying the lower rate of SLfT to any particular disposal of waste fines.

You must produce and retain appropriate records to show that waste fines disposed of at your landfill site are eligible for the lower rate of SLfT, for a period of 5 years. Evidence contained in the WM3 classification, pre-acceptance questionnaires, visual inspections, waste transfer notes and loss on ignition test results will help you to support your decision.

4. WM3 Classification

As part of their duty of care, waste producers must classify the waste that their business produces and WM3 is the current UK standard that they must use. (See: Technical Guidance WM3: Guidance on the Classification and assessment of waste).

In order for the lower rate of SLfT to apply to the load of fines, it must not be classified as hazardous waste under WM3. You should review evidence of non-hazardous classification and be satisfied that it appears to be a true and accurate assessment. A copy of this evidence should be retained by you to support the lower rate of SLfT applied to the load. This requirement to obtain evidence of a waste streams WM3 classification is not intended to be an increase in the duty of care that already exists for the waste producer or for the landfill operator.

Chemical analysis will only be necessary if it is required under the WM3 procedure for classification of waste.

5. Pre-Acceptance Checks

You should complete a number of pre-acceptance checks with waste producers to ensure the waste fines qualify for the lower rate. The nature of these pre-acceptance checks will vary depending on your individual circumstances and the particulars of your process of accepting waste.

In the absence of satisfactory evidence gathered from the pre-acceptance checks that demonstrate the waste fines qualifies for the lower rate of SLfT, the standard rate will apply to the waste fines.

5.1 Example Pre-acceptance Questionnaire

You should issue a questionnaire and declaration for completion by the waste producer that produces fines for disposal at your landfill site. The questionnaire provided outlines the information that is required in order to determine that the fines received are qualifying. The answers to the questionnaire will also assist you in determining the appropriate frequency of testing required (Please see section 13.3 – frequency of testing table).

You may use your own questionnaire however you should ensure it contains all of the information indicated in the example questionnaire.

Where the waste producer disposes of more than one fines waste stream, you must obtain information and complete a questionnaire for each waste stream.

The information provided by the waste producer should be current, and should be reviewed at least annually or more frequently if you have any reason to think the information provided has changed. You should require the waste producer to notify you of any change to the waste stream that would cause it’s classification to vary. You should be satisfied that it appears to be a true and accurate assessment.

For example, seasonal changes may impact on input materials that are used to produce waste fines. In these circumstances you would review the information provided for the waste stream in the pre-acceptance questionnaire and require the waste producer to notify you of the change to the waste fines input material.

Pre-Acceptance Questionnaire.pdf

Where the information supplied by the waste producer in the pre-acceptance questionnaire does not support that the material is liable for the lower rate of SLfT, the standard rate will apply to the material.

5.2 Waste Transfer Notes

Where we refer to a waste transfer note in this guidance we mean a written description of the waste kept by the transferor and transferee of the waste. The description on the waste transfer note must adequately identify the type of waste and whether it is qualifying or non-qualifying material.

For example a description of ‘waste fines’ adequately describes the type of waste, but does not identify what rate of SLfT applies. Similarly, a description of ‘lower rate’ identifies the rate of SLfT, but not the type of waste, whereas ‘qualifying fines – lower rate’ provides both an adequate description of both the waste type and the applicable rate of SLfT.

Some examples of waste descriptions that would adequately identify the rate of SLfT payable are:

• Qualifying fines – lower rate

• Screened subsoil and particles from stones containing an incidental amount of paper and wood – lower rate

• Fines – standard rate

• Mixtures of materials from the mechanical treatment of waste – standard rate

This description should be supported by the detailed description of the waste given in the pre-acceptance questionnaire.

5.3 Visual Inspection

For SLfT purposes, inspection of disposals is your responsibility when you accept delivery of the waste. A visual inspection should be conducted when the waste is accepted. If the inspection does not indicate the material is liable for the lower rate of SLfT, the standard rate should apply to the material.

The visual inspection should confirm that the description of the material on the waste transfer note accurately matches the material delivered to your site. This should be consistent throughout the load.

6. Loss on Ignition (LoI) Test for Fines

An LOI test determines the organic content of material. The difference in the mass of the tested material before and after the ignition process is used to calculate the LOI result. The LOI result will inform whether the waste is liable at the lower rate of SLfT, but is not the only determining factor as shown by the flowchart above. For fines to be treated as qualifying material, they must give an LOI result of 10% or less. For qualifying fines that include a small amount of non-qualifying material, the LOI test must be carried out along with the other procedures described i.e. WM3 classification, visual inspections, checking the waste transfer notes and completing a pre-acceptance questionnaire.

LoI test results that are 10% or less LoI threshold should be kept as supporting evidence of the lower rate of SLfT.

7. Prescribed Test

Making a Representative Sample

The sample of fines you send for testing must be representative of the whole load or stockpile. To take a representative sample the following methodology applies:

• the sample must be taken from across the whole load or stockpile of waste fines i.e. top, middle and bottom

• a composite (master) sample must be produced from a mix of sub-samples taken from at least 6 different places across the whole load of fines

• the sub-samples must be selected at random

• the sub-samples must be thoroughly mixed to ensure that a representative 1kg composite sample is sent for testing

8. LoI Test Methodology

You must arrange to undertake the LOI test prescribed below for SLfT purposes:

Sample preparation

1. dry the 1 kg sample at a temperature of between 30° C and 50° C, until a constant weight is achieved

2. cone and divide the 1kg sample to select a 200g sub-sample

3. remove material, exceeding 20 mm that conforms to Group 1 and Group 2 of the Scottish Landfill Tax (Qualifying Material) Order 2016 from the sub-sample. Record the weight of the sub-sample and of the removed material

4. grind the remaining part of the sub-sample to a particle size of 2mm or less to produce a homogenous sample. Any material not passing the 2mm sieve must be added back into the ground sample and the combined sample mixed and homogenised

5. Any material that does not pass the 2mm sieve must be weighed and recorded on the lab result form e.g. non-ground material – 15g comprising wood, metal nail, plastic

The prepared sample should be retained in case a retest is needed or Revenue Scotland wishes to test the material. You must preserve this prepared sample for 3 months from the date the LoI test is completed.

Sample treatment

1. Place 20g of the homogenous ground sample in a dried, weighed dish and weigh

2. Dry the sample in an oven at 180° C to a constant weight,

3. Cool in a desiccator for a minimum of 45 minutes

4. Record the weight of the sample

5. Transfer the sample to a muffle furnace at a temperature of 440° C for a minimum of 5 hours

6. Cool in a desiccator as before and reweigh

LoI Calculation

Calculate the loss on ignition at 440° C as a percentage of the material after the initial drying at 30° to 50° taking into account the mass of removed Group 1 and Group 2 material and the weight loss at 180°. 

LoI Summary Calculation

LoI % = (A x 100) / ((B x C / D) – E)

Where:

• A is the loss on ignition at 440°

• B is 20 (the weight of the 20g sub-sample)

• C is 200 (the weight of the 200g sample)

• D is the weight of the sample after removal of the >20 mm Gp1 and Gp2 material

• E is the weight loss after drying the 20g sub-sample at 180°

Where a LoI result is 10% or less, you must keep a record of the test result.

9. What if a Tested Sample Is Above the LoI Threshold?

You must complete all of the following actions if a sample is above the LoI threshold:

1. You must declare the quantity of waste fines to Revenue Scotland on your SLfT return and pay tax on it at the standard rate of Scottish Landfill Tax.
2. You must review all of the pre-acceptance checks completed for that particular waste stream for the waste producer. [s.5]
3. You must increase the frequency of testing of subsequent loads of the waste stream in reference to the frequency of testing table [s.12]
4. You must notify Revenue Scotland of the test result, providing all the requested details on the Loss on Ignition Test Result Form. [s.10]

10. Loss on Ignition Test Result Form

A Loss on Ignition Test Result Form must be completed each time a sample gives a loss on ignition test result of over 10%.

You should submit all such completed forms with the SLfT return for the period in which the test(s) took place and no later than 44 days after the end of the quarterly accounting period in which the test took place.

Loss of Ignition Test Result Form.pdf

11. Can a sample be retested that is above the LoI threshold?

If the prescribed test is conducted and the result is above the LoI threshold, you may conduct a single retest provided the following conditions are met:

1. The original prepared sample of fines must be retested.
2. The first LoI result must not exceed 10.5%
3. The prescribed retest must take place within 21 days of the first LoI result.

In such circumstances, if the retest result is within the LoI threshold, you may treat this as the test result for determining liability to SLfT.

12. Frequency of Testing

From 1 October 2016, you must conduct the prescribed LoI test for each waste producer that disposes of qualifying fines at your landfill site. If a waste producer disposes of more than one qualifying fines waste stream at your landfill site, the test should be completed in respect of each separate line of waste fines. These requirements apply equally for fines derived from waste already at your site.

12.1 First Test

From 1 October 2016, you must complete the first test during the period of when the first 500 tonnes of their waste fines is disposed of to your landfill site or within the first month, whichever is reached first.

12. 2 Subsequent Tests

After you have completed the first LoI test the frequency of testing that will apply will vary depending on the particular waste stream. You can determine the frequency of testing that will apply using the risk indicators in the Frequency of Testing table below. A waste stream will be identified as low, medium or high risk by the risk indicators present.

If you have indicators that fall in more than one risk category, you should adopt the highest risk rating indicated. For example, if both the pre-acceptance checks and visual inspection indicates low risk, but 1 of the last 20 LOI tests have failed, the medium risk classification would apply. If a subsequent LOI test was failed so that more than one in the last 20 tests were failed, the high risk classification would apply, irrespective of the other indicators.

If the high risk classification applies, the standard rate of SLfT will apply to each load that fails. If the medium risk classification applies, then, on the assumption that all the other requirements in the flow chart are met, the standard rate of SLfT will only apply to the one load that has failed. The lower rate will apply to the other loads until such time that another test is failed, at which point the higher rate will again apply to that individual load that failed and each subsequent load will be tested to determine the rate of SLfT as indicated by the High Risk frequency of testing.

It is possible to go straight from a high risk classification to a low risk classification if all the low risk indicators are met.

12.4 Tests outside the requirements of the Frequency of Testing Table

You may conduct a test at times outside the prescribed frequency described in the Frequency of Testing table. In the event that you conduct a LoI test outside of the prescribed frequency, the timing of the next prescribed test will be determined by that test.

13. Power to direct a test

Where we consider it necessary for the protection of the revenue against mistake or fraud, we can direct that a representative sample of fines is taken and sent for testing at your cost. We may also collect a sample of untested material from the waste stream and arrange for this to be tested. In such circumstances, the results of that test may be used to determine the liability of Scottish landfill tax. In cases of doubt, for example when there is insufficient material provided to carry out a test, tax will be charged at the standard rate for each load of waste fines.

Waste soil

Note: From 1 October 2015, under this direction made under section 14 of the LT(S)A 2014, we will require you to use the flowchart in this section in order to determine whether a load consisting of waste soils only, is chargeable at the standard or lower rate of SLfT when disposed of to landfill.

General Guidance for Soil

For the purposes of SLfT, soil is a qualifying material if it wholly consists of naturally occurring sub-soil as listed in Group 1 of the Schedule notes to The Scottish Landfill Tax (Qualifying Material) Order 2016.

In practice, even virgin sub-soil is likely to be found to contain other materials when subjected to testing and unless these are also listed as qualifying materials and the criteria set out in the Order are met, the whole load will be subject to the standard rate of tax when disposed of to landfill.

The only exception to this is where the amount of non-qualifying material contained in the soil is small and we have directed that the whole load may be charged at the lower rate of tax. This section of guidance explains the process we will expect you to follow from 1 October 2015 to determine the correct rate of tax chargeable on such loads.

WM3:

As part of their duty of care, waste producers must classify the waste that their business produces and WM3 is the current UK standard that they must use. (See: Technical Guidance WM3: Guidance on the Classification and assessment of waste.)

In order for lower rate SLfT to apply to the load of soil, it must not be classed as hazardous waste under WM3. The person disposing of the waste should be asked to provide evidence of the non-hazardous classification of the load under WM3. You should review the evidence provided and be satisfied that it appears to be a true and accurate assessment. You must retain a copy of this evidence  and make it available to us if we ask to see it to support the rate of SLfT declared in your tax return.

Flowchart for determining the rate of SLfT chargeable per load of waste soil. (Applies from 1 October 2015)

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