Following the introduction of the loss on ignition test for landfill waste, Nick Ball of Impact Air Systems believes that many waste managers are paying more landfill tax unnecessarily...but says there is a solution.
In 2015, a new loss on ignition (LOI) test for landfill waste was introduced to determine the correct tax liability of fines. The LOI testing regulation came into force through the Landfill Tax (qualifying Fines) Order. Under the new regulations, samples of waste ‘fines’ must be tested in a laboratory to determine the LOI percentage. Wastes with less than 10 percent LOI qualify for a lower rate of landfill tax.
When the new testing regime was announced, waste managers were generally sceptical, and many feared that the development would create a lot of extra work and would cost their organisations more. However, despite broad acceptance of the proposals, some experts feared that infrequency of checks and a lack of consistency between samples, as well as uncertainty over who will be administering the tests, could leave the proposed system open to abuse.
However, the Environmental Services Association (ESA) embraced the proposals to regulate landfill tax through standardised LOI testing. United Resource Operators Consortium (UROC) also welcomed proposals but urged its members to provide data to determine what LOI percentage operators are currently achieving on their trommel fines.
Every week, waste managers come along to our testing facility in Leicester in search of ways to further separate their waste to ensure valuable materials are recovered. By using air separation technology, the waste managers we work with can increase revenue and minimise disposal costs – the majority have seen a reduction in their LOI, making them liable for the lower tax amount. The issue is, there are lots of waste managers out there that haven’t yet found this solution, and are therefore forced to pay more landfill tax unnecessarily.
Our study manages to capture the honest opinions and input from waste managers, who responded to 14 questions relating to the LOI regulations; how they have responded to the changes; and their concerns surrounding them. Despite it being compulsory for waste operators to have a sample of their waste tested to ensure they are paying the correct amount of landfill tax, 30 percent of businesses have not yet had their waste ‘fines’ laboratory tested.
Our research revealed that 80 percent of waste operators have been hit hard with increased tax bills since the loss on ignition (LOI) regulations were introduced paying up to an additional 70 percent in landfill tax since the changes came into force in 2015. Interestingly, our study showed that the new tax threshold has changed the way waste operators choose to recycle to save money, as 65 percent stated they are finding alternative waste management solutions. This included investing in new equipment for further processing, such as density separation, additional screening, detailed reviews of waste streams, extracting inerts and strict regulations around the type of waste entering the facility.
We plan to share our findings with the government officials responsible for providing guidance for LOI testing and regulations to promote positive change.
Waste management companies are starting to feel the pinch of the recent LOI regulations and are looking for ways to reduce their tax exposure. This urged us to develop our current recycling solutions to help waste operators to reduce their landfill tax exposure and ensure LOI levels are below 10 percent... the Zigzag Classification Unit (ZCU) was therefore born.
We wanted to find a way to make the testing process simple, quick and cost-effective, to provide the easiest way of introducing the ZCU to other waste operators in a bid to resolve their waste separation and landfill tax quandary. The Impact ZCU is a proven solution already working in many waste sites across the world.
Our testing facility at Impact has been designed so potential customers can bring a sizeable sample along and see realistic results for themselves offering them a ‘try before they buy’ option. We have seen a huge uptake over the last 12 months.
Waste operators are continually surprised with the impressive results of the ZCU separation process and the return on investment so we are confident it will gain increased interest again this year.