26 January 1996

Landfill tax is dirty shame for sugar industry

By Philip Clarke

BRITISH Sugar faces a tax bill of up to £2m for disposing of excess soil when the government introduces its landfill tax in October – a cost which could be passed back to producers.

Despite industry efforts to reduce the amount of soil arriving at BS factories as dirt tare, as much as 1m tonnes arrives each year attached to the beet crop.

And since 1987, when new rules were introduced to try to prevent the spread of rhizomania, most of that soil has been disposed of in landfill sites. (Previously it had been returned to farms. Now about the only alternative to landfill is for landscaping.)

As part of the Finance Bill, inert material used in landfill will be liable to a £2/t tax from Oct 1, including any soil used to cap a site.

Both BS and the NFU have been trying to get the ruling changed to make soil exempt. But this was rejected by paymaster general David Heathcoat-Amory when the matter was discussed in the House of Commons this week.

MP for Congleton, Ann Winterton, had argued against a tax "for merely returning soil to soil". "That case is especially valid because one of the factors that causes the industrys inability to dispose of soil is the restrictions to prevent the spread of rhizomania. The application of plant health measures should not be used to charge an extra tax."

UK growers already had the best record in Europe of reducing dirt tare, she added. In France the proportion of topsoil delivered with beet was as much as 30%.

BS business development manager, Peter Williams, earlier explained that producers already had an incentive to minimise waste in that any excessively dirty loads can be rejected, while higher dirt tare merely drives up haulage costs per clean tonne of beet delivered. "Furthermore, using excess soil to cap landfill sites is an environmental benefit," he said.

Despite these arguments, Mr Heathcoat-Amory said the case for an exemption had not been made. But he encouraged MAFF to look at adapting the rhizomania restrictions to find other ways of disposing of soil. It might be possible to store it without paying the tax.

Mr Williams said the fight would continue. "But if we end up paying the tax, it is a cost the whole industry will have to bear," he warned.

lThe CLA says the introduction of the landfill tax will damage the environment. "The proposals contained in the Finance Bill will encourage fly-tipping, tax the spread of organic manure and add substantially to the costs and bureaucracy for small businesses," says tax specialist Adrian Baird. &#42

British Sugar estimates that between 0.5 and 1m tonnes of soil a year is delivered to its factories, representing a tax liability of up to £2m.