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Thursday 31st May 2012 | 08:29
Will the 'skip tax' be the next U-turn by the Treasury?
Today, the construction industry is lobbying the Chancellor hard over what looks like a classic HMRC blunder: retrospectively changing the rules on landfill tax rates.
The rate charged for dumping some types of waste will soar from £2.50 to £64 a tonne. A 2,500% increase is a 'tax bombshell' in anyone's language.
For once this isn't a Budget blunder but it could be just as damaging. Lorry skip firms have already noisily protested in Parliament Square about it and today the Indy reports that the industry is holding a Commons meeting to which Treasury ministers are invited.
There are dire warnings of more fly-tipping and skips lying uncollected as a result of the shock change, announced by the HMRC just a few days ago. There is even talk - in that great industry organ Construction News - of a mass protest over the Diamond Jubilee weekend.
The row stems from a Statutory Instrument introduced by the HMRC a year ago. They have now told the industry they have to pay the higher rate of tax - and are looking to collect it retrospectively. That's a huge £1.4bn hit for an industry that is already struggling.
Don't forget that construction was one of the reasons that GDP was so negative earlier this year, forcing us into a double-dip recession.
Given the Chancellor's noted scepticism about the impact of 'green' policies on business and growth, he may well be open to reviewing this one.
But there is a final, lovely touch to all this. The HMRC official who is credited with leading policy on this is called...Darren Greedy.
You really couldn't make it up.
UPDATE: The HMRC says that it was last week simply seeking to set out what the current rules are and how they are applied. It says its announcement came after the request of some landfill operators who were complaining that some of their rivals weren't operating the rules correctly.
In terms of any retrospective payment, it seems that's upto individual landfill operators. HMRC will seek the tax from them and they can then pass it on to skip operators who they believe have been charged at the wrong rate.
Here's the HMRC spokesman's statement:
“HMRC responded to concerns expressed by landfill operators that some companies were not paying the right rate of tax and in the process disadvantaging those who paid the correct rate.“We have addressed this by issuing guidance to remind them of the current rules and ensure a level playing field for all businesses working in landfill.”
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