Landfill Tax UK: Current Rates and How Equipment Reduces Your Liability

Updated on: 5th March 2026 By:

Landfill tax is a levy charged on waste disposed of at licensed landfill sites in the UK. It was introduced in 1996 as an environmental tax designed to make landfill progressively less economically attractive relative to recycling and recovery, and to fund environmental remediation and the Landfill Communities Fund. The tax is charged to the landfill operator and is passed through in gate fees charged to waste producers and collectors, which means every business sending waste to landfill pays landfill tax through its waste collection costs, whether or not it realises this.

The rates are substantial and rise annually. Understanding the current rates, which waste types attract the lower versus higher rate, and how on-site waste management equipment directly reduces a business’s exposure to landfill tax liability is a straightforward way to quantify the financial return on waste equipment investment.

Current UK Landfill Tax Rates

Landfill tax applies in two rate categories. The standard rate applies to active waste, which is waste that is biodegradable, reactive, or contaminated in ways that generate leachate or gas in landfill conditions. The lower rate applies to inert or inactive waste such as clean soil, concrete, brick rubble, and similar construction materials that present minimal environmental risk in landfill. The rates are set annually in the Budget and increase in line with the Retail Prices Index (RPI) at a minimum, often by more.

Landfill Tax Category	2024/25 Rate per Tonne	Typical Waste Types	Equipment That Diverts This Waste
Standard rate (active waste)	£103.70 per tonne	General commercial; food; mixed recyclables	Compactors; balers; waste-to-energy diversion
Lower rate (inert waste)	£3.25 per tonne	Clean soil; concrete; brick; rock	Minimal equipment requirement for inversion
Unauthorised disposal	150% of standard rate surcharge	Any fly-tipped waste traced to producer	Compliance via proper management; WTNs

How Landfill Tax Is Passed Through to Businesses

Landfill tax is charged to licensed landfill site operators at the point of disposal. Operators recover the cost by including it in the gate fees they charge waste collectors, who in turn include it in the collection fees they charge businesses. A waste collector taking general commercial waste to landfill at £103.70 per tonne of landfill tax cannot simply absorb that cost; it is built into the collection price charged to the waste producer. Businesses generating large volumes of general waste are therefore paying landfill tax on every tonne they send to landfill, embedded in their waste collection invoice.

For a typical medium-sized commercial operation generating 10 tonnes of waste per week, with 70% going to landfill and 30% already recycled, the annual landfill tax embedded in their waste collection cost is approximately: 7 tonnes per week x 52 weeks x £103.70 = £37,740 per year. Reducing the landfill fraction by diverting recyclables to recovery eliminates the tax exposure on the diverted tonnage directly.

A business that installs a Gradeall vertical baler and separates cardboard and plastic film from its general waste stream, diverting 3 tonnes per week to a recycler, reduces its annual landfill tax exposure by approximately 3 x 52 x £103.70 = £16,177 per year. This reduction in landfill tax exposure is a direct component of the baler’s financial return.

Waste Types That Attract Standard Rate Tax

Most commercial and industrial waste attracts the standard rate of landfill tax because it contains organic, biodegradable, or chemically reactive components. Mixed general waste, food waste, paper and cardboard, plastics, textiles, and most packaging materials are all standard rate waste. The standard rate applies to the entire consignment if the waste contains any standard rate material, even if it also contains inert fractions.

This is why source separation of recyclable streams from general waste is doubly beneficial: it diverts recyclable material to recovery (generating recycling revenue or reducing collection cost) and reduces the tonnage of standard rate waste going to landfill (reducing the landfill tax embedded in collection costs). Both benefits compound.

“The landfill tax argument for waste equipment investment is one of the most straightforward ROI calculations we can offer,” says Conor Murphy, Director of Gradeall International. “If you know your current tonnage going to landfill, you can calculate your landfill tax exposure directly from the published rate. The equipment that diverts even a fraction of that tonnage to recycling is paying back partly through the landfill tax reduction alone, before you account for recycling revenue or collection cost savings.”

For tyre recycling operations where every tonne of tyres baled is a tonne diverted from landfill disposal, the Gradeall MKII Tyre Baler generates a landfill tax saving on every bale produced. At the 2024/25 standard rate of £103.70 per tonne, a baler producing 10 tonnes of baled tyres per week diverts £53,924 per year in landfill tax from the disposal cost.

Frequently Asked Questions

Is landfill tax included in my waste collection invoice?

Yes, in most cases. Waste collectors who take general commercial waste to landfill are charged landfill tax by the landfill site and include it in their gate fee, which flows into the collection price they charge businesses. The landfill tax element is not always itemised separately on your invoice; some contractors include it in their overall collection rate. Ask your waste contractor to confirm how much of your collection cost relates to landfill tax to understand your exposure and the saving potential from waste diversion.

Does landfill tax apply to waste sent to waste-to-energy (EfW) facilities?

No. Landfill tax applies specifically to waste disposed of at landfill sites. Waste sent to energy-from-waste (EfW) facilities, anaerobic digestion plants, composting operations, or recycling facilities is not subject to landfill tax. This makes diversion from landfill to any alternative management route financially advantageous from a landfill tax perspective, though the collection costs and gate fees at alternative facilities also affect the overall economics.

Can businesses claim a refund on landfill tax?

Businesses cannot claim refunds of landfill tax directly; it is a tax on the landfill site operator, not directly on the waste producer. However, landfill site operators who have overpaid tax or who have tax credited to them through the Landfill Communities Fund contributions mechanism can apply to HMRC for adjustments. For waste producers, the practical approach to reducing landfill tax exposure is waste diversion rather than seeking refunds from a tax applied upstream in the collection chain.

Does landfill tax apply in Scotland?

Scotland has its own landfill tax, Scottish Landfill Tax (SLfT), administered by Revenue Scotland. The Scottish rates are set independently of UK Budget decisions and are broadly aligned with the England and Wales rates. In Northern Ireland, UK landfill tax applies. The principle of standard rate tax on active waste and lower rate tax on inert waste applies across all UK jurisdictions, though the specific rates may differ marginally between Scotland and England/Wales/Northern Ireland at any given time.

How does composting or anaerobic digestion of food waste compare to landfill tax?

Food waste sent to composting or anaerobic digestion facilities is diverted from landfill, avoiding the standard rate landfill tax on that tonnage. Food waste at the standard landfill tax rate represents significant tax exposure for hospitality, food production, and retail businesses with high organic waste volumes. Diversion to a licensed composting or AD facility eliminates the landfill tax component of the food waste disposal cost. The economics depend on the relative gate fees at the alternative facility versus the combined landfill gate fee and landfill tax at a landfill site.