YET another Government U-turn has given a Northumberland recycling business hope it will survive.
Yesterday The Journal reported how HM Revenue and Customs had increased the rate of tax of some materials taken to landfill sites from £2.50 per tonne to £64, a rise of over 2,500%.
The move angered Tony Hughes, the owner of a waste transfer station at Cramlington who said it would cost him hundreds of thousands of pounds a year and threaten the jobs of his 13 staff.
But HMRC bosses last night said the massive hike had been based on a misunderstanding and that some landfill sites were wrongly charging the higher rate across the board.
Last night, Mr Hughes called on the Government to clarify whether or not he should be paying the higher figure.
He said: “It looks like there could be a glimmer of hope at the end of the tunnel but as yet we are no further forward.”
The Government changes applied to trommel fines – a kind of dust filtered out by a screen – and were introduced in response to concerns from operators of landfill sites that some businesses were paying more tax than others.
Mr Hughes said the changes would cost him £10,000 per week. He feared an overall tax bill of £1.5m a year for a business having only a turnover of £750,000.
Mr Hughes also voiced concerns that he would have nowhere to put the materials given the prohibitive cost of taking them to landfill.
Industry representatives staged a lobby of parliament yesterday, telling MPs that operators were unable to empty skips which they had loaned out because of the punitive taxes being charged. They warned that the situation could prove catastrophic to the industry.
However, HMRC bosses insisted the massive hike was based on a misunderstanding. They said some landfill operators had misinterpreted guidance issued last week to help them identify which rates should be applied to which materials and wrongly hiked prices across the board.
The HMRC said it had issued new guidance clarifying how the levy should be applied. A spokeswoman said: “This is not a U-turn, it is a clarification.
“The rules have been in place since 2009 and the rules have not changed.
“The operators need to look at the rules.”
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