Devon Waste Management – Waste firms win appeal in landfill 'fluff' case

05 February 2020

In Devon Waste Management Ltd and Others v HMRC [2020] UKUT 1 (TCC), the Upper Tribunal (UT) has held that the disposal of certain waste materials did not attract a charge to landfill tax.


The appellants operate in the field of waste management and disposal. In so far as they dispose of materials as waste by way of landfill at landfill sites, they are liable to pay landfill tax.

Landfill tax was introduced by Finance Act 1996 (FA 1996). Changes were made to the landfill tax regime in 2009, as a result of the decision of the Court of Appeal in HMRC v Waste Recycling 35 Group Limited [2008] EWCA Civ 849 (WRG). The 2009 changes were made by Finance Act 2009 (FA 2009), with effect from 1 September 2009. The result of these changes was that certain activities were treated as taxable disposals under section 40, FA 1996, whereas they had not been so under the pre-2009 regime.

Section 40, FA 1996, as it was in force at the relevant time, provided as follows:

"(1) Tax shall be charged on a taxable disposal.

(2) A disposal is a taxable disposal if -

(a) it is a disposal of material as waste,

(b) it is made by way of landfill,

(c) it is made at a landfill site, and

(d) it is made on or after 1st October 1996."

In relation to section 40(2)(a), section 64, FA 1996, provides that a disposal of material is a disposal of it as waste: "if the person making the disposal does so with the intention of discarding the material".

The appellants and HMRC were in dispute as to whether certain waste material used in landfill sites to provide a protective layer against leakage, was indistinguishable from other waste material disposed of by way of landfill and was therefore subject to landfill tax pursuant to section 40, FA 1996.

The appellants appealed to the First-tier Tribunal (FTT).

There were two appeals before the FTT. The issue considered in the first appeal was whether certain waste material from households, shops and offices was subject to landfill tax. Some of this waste material (known as 'fluff') was selected to be used as a layer to protect against leakage of polluting liquids and gases. When used in this way, the fluff performed a function in the landfill rather than simply being waste that had been disposed of.

The second appeal related to a material known as 'EVP', which was similar to fluff and carried out a similar function.

The appellants argued that fluff and EVP was not a taxable disposable under FA 1996, on the basis that WRG was authority for the principle that making use of the material for the site operator's purposes in connection with regulatory compliance was inconsistent with an intention to discard, even though the materials had been disposed of at landfill sites, because some use was made of it in connection with the design and operation of the landfill sites.

FTT decisions

The appeals were dismissed.

The FTT found that the use made of the material disposed of was only an indicator of whether there was an intention to discard the material, and that use was not conclusive in determining whether it was discarded. In the view of the FTT, the use of such material as a protective layer was not sufficient to negate an intention to discard it as it was destined for landfill in any event and because there was no physical difference between that material and the other general waste disposed of at the landfill sites. The FTT therefore held that the disposal of the waste was a taxable disposal by way of landfill, for the purposes of section 40(2)(b), FA 1996.

The appellants appealed.

UT decision

The appeals were allowed.

HMRC argued that there was a "taxable disposal"  because the material in question was discarded by the site operators and so was disposed of "as waste".
The appellants argued that there was no taxable disposal because, although disposed of, the material was not discarded because some use was made of it in connection with the design and operation of the landfill sites.

In the view of the UT, the FTT had misinterpreted the ratio of WRG. That case decided that if a site operator disposed of material at a landfill site with the intention and effect of making use of its properties for its own purposes, including regulatory compliance, the disposal was not made with the intention of discarding the material. The disposals were therefore not taxable disposals.

The UT exercised the power conferred on it by section 12, the Tribunals, Courts and Enforcement Act 2007, to re-make the FTT's decision.


The FTT fell into the "once waste, always waste" trap warned against in WRG and Parkwood Landfill Ltd v HMRC [2002] EWCA Civ 1707. It is not the character of the material that is determinative of whether it is deposited as waste, but rather the intention with which it is deposited.

In the instant case, the appellants, when disposing of fluff and EVP at their landfill sites, intended to and did make use of the material's properties for their own purposes. This was sufficient to prevent the disposal of the material from being subject to landfill tax.

The decision can be viewed here.

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