Patersons of Greenoakhill Limited v The Commissioners for HM Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judge | Mrs Justice Rose |
| Neutral Citation | [2014] UKUT 0225 (TCC) |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Subject Matter | Tax,22 May 2014 |
| Date | 22 May 2014 |
| Published date | 01 December 2016 |
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[2014] UKUT 0225 (TCC)
FTC/28/2013
LANDFILL TAX - biodegradable material sent to landfill - material decomposes
and produces landfill gas including methane - methane used to power gas engines
generating electricity - whether that material sent to landfill which generates gas
used for electricity generation discarded as waste by appellant
UPPER TRIBUNAL
(TAX AND CHANCERY CHAMBER)
BETWEEN:
PATERSONS OF GREENOAKHILL LTD
Appellant
- and –
THE COMMISSIONERS FOR HER MAJESTY’ S
REVENUE AND CUSTOMS Respondents
TRIBUNAL: The Hon Mrs Justice Rose
Roderick Cordara QC and Zizhen Yang instructed by KPMG, Manchester for the
Appellant
Melanie Hall QC and Simon Charles instructed by the General Counsel and Solicitor to
HM Revenue and Customs for the Respondents
© CROWN COPYRIGHT 2014
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DECISION
The appeal of the Appellant IS DISMISSED
REASONS
1. This appeal concerns the application of landfill tax where some of the material
deposited in a landfill site decomposes and produces landfill gas which is
captured and used by the operator of the site to generate electricity. The First-
tier Tribunal (‘FTT’ or ‘the Tribunal’) held in a decision dated 2 August 2012
that the Appellant was not entitled to reclaim the landfill tax paid on that
biodegradable material.
2. The Appellant (‘Patersons’) operates a landfill site in Mount Vernon,
Glasgow. The site is an old sand and gravel quarry and covers 91 hectares.
Patersons developed the site for landfill purposes in stages so that it now
consists of four zones. Zones 1 and 2 are closed to the acceptance of more
landfill but continue to produce landfill gas. Zone 3 also contains gas-
producing materials and is open for the deposit of more material. Zone 4 is an
inert area not containing any gas-producing materials. Each zone in the site
consists of a series of cells which have been engineered to operate
independently of each other so that gas and other materials cannot migrate
from one part of the site to another.
3. When a vehicle loaded with material for disposal arrives at Patersons’ site
gates, it passes over a weighbridge. If the weighbridge operator is satisfied
that the load can be accepted, he issues the driver with a ticket and instructs
him to proceed. Material other than building waste is taken to the transfer
station. Items within the waste such as wood, metal, bricks and stones which
can all be recycled are separated out and sold off the site. It is accepted that
landfill tax is not payable on that material.
4. Landfill gas is mainly methane with some carbon dioxide. The FTT described
the process by which landfill gas is generated in the landfill site:
“98. It is from the material sent to landfill that landfill gas, and hence
methane, is produced. The production process requires no action by
Patersons; the decomposition process is triggered by the deposit into
landfill. Material decomposes at different rates so that some produces
landfill gas in a matter of weeks, whilst other takes much longer for the
degeneration process to begin. But when decomposition has begun, it
continues for a lengthy period of time – a period which it is impossible to
calculate, but which may extend to 50 or more years. Nor can it be said
what quantity or quality of methane will be produced by any given load of
waste material deposited into landfill…”
5. The landfill gas generated at Patersons’ site is collected and the methane is
burned in gas generators to generate electricity. Patersons sells that electricity
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