Waste Recycling Group Ltd v HMRC
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BARLING,Mr Justice Barling |
| Judgment Date | 20 December 2007 |
| Neutral Citation | [2007] EWHC 3014 (Ch) |
| Docket Number | Case No: CH/2007/APP/0255 |
| Court | Chancery Division |
| Date | 20 December 2007 |
[2007] EWHC 3014 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Barling
Case No: CH/2007/APP/0255
Penny Hamilton (instructed by PricewaterhouseCoopers Legal LLP) for the Waste Recycling Group Limited
James Puzey (instructed by the Solicitor for H.M. Revenue and Customs) for the Commissioners for HMRC
Hearing dates: Wednesday 21st November 2007, Thursday 22nd November 2007
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is an appeal by Waste Recycling Group Ltd (“WRG”) against a decision (“the Decision”) of the Value Added Tax and Duties Tribunal (“the Tribunal”) dated the 8 th March 2007 dismissing WRG's appeal against the rejection by the Commissioners for HM Revenue and Customs (“HMRC”) of WRG's voluntary disclosure for recovery of allegedly overpaid landfill tax (“tax”) in the amended sum of £2,120,552. The sum referred to in the Decision is £2,116,892, but it is common ground that this is incorrect.
All the tax was paid in respect of amounts of inert material which were used by WRG on its landfill sites for engineering purposes (for example road making) or in order to provide the required daily cover of the landfill site.
The Tribunal was asked to determine the issues in dispute in principle in the context of eleven sets of facts. These sets, or categories as they have been called, are not mutually exclusive; they may in certain cases overlap.
If any particular disposal of inert material at a WRG landfill site represented a “taxable disposal” within the meaning of section 40 of the Finance Act 1996 then by virtue of section 41(1) of that Act WRG was liable for the relevant tax as the operator of that site.
To be taxable a disposal must fulfil four cumulative conditions:
i) it must be “a disposal of material as waste” (section 40(2)(a))
ii) it must be “made by way of landfill” (section 40(2)(b))
iii) it must be “made at a landfill site” (section 40(2)(c))
iv) it must be “made on or after 1 October 1996” (section 40(2)(d))
In the present appeal the only issue relates to the first of these conditions. It is accepted that in regard to all the inert material with which this appeal is concerned the three other conditions are satisfied. Therefore at the heart of this appeal is the question whether, in each of the postulated categories, the relevant disposal of the inert material was “a disposal of material as waste” within the meaning of sub-section 40 (2)(a).
In order to examine that question it is necessary to identify the person who is making the disposal of material by way of landfill at a landfill site after 1 October 1996, then to consider whether the person making that disposal is doing so “on behalf of another person”, which by virtue of sub-sections 64(3) and 64(4) of the Act includes doing so “at the request” or “in pursuance of a contract with another person”, and finally to determine whether the person making the disposal (or, if appropriate, the person who is to be “treated” as so doing by virtue of those sub-sections) is disposing of that material “as waste” ie “with the intention of discarding the material” (section 64(1)).
If A is identified as the relevant disposer of the material when the relevant disposer is actually B, then things may go wrong because A and B may well have entirely different intentions vis à vis the material. This is the reason why in HM Commissioners of Customs and Excise v Darfish Ltd (unreported judgment of 20 March 2000 referred to in more detail below) Moses J (as he then was) differed from the tribunal in that case.
The facts
A Statement of Agreed Facts and two unchallenged witness statements were put before the Tribunal and are available to me. The basic facts are not in dispute, and for present purposes are very clearly set out in the Decision and I set out the relevant paragraphs verbatim.
“1. As its name suggests, the Appellant (“WRG”) is in the business of waste management. It is the representative member of a group of companies which (among other things) operate landfill sites throughout the United Kingdom. On 30 December 2002 its representatives, PricewaterhouseCoopers, submitted to the Respondents a claim for a refund of landfill tax which, it is said, the group had overpaid during the period from 1 October 1996 to 30 September 2002. After a good deal of correspondence and a number of discussions, in the course of which the claim was modified somewhat, the Respondents refused to make the refund. That refusal was communicated by letter of 26 March 2004. A review was requested, and duly carried out, but the original decision was upheld by way of a letter dated 23 June 2004, and WRG now challenges that review decision. While the appeal was in progress, but before the hearing the Respondents made a modest concession by accepting that, of the original claim, £3,660 had indeed been overpaid, but they maintain their position in respect of the remaining £2,116, 892. [Now agreed to be £2,120,552.]
…
3. WRG's group operates about 60 landfill sites across the UK, most accepting both inert and active waste. All the landfill sites are licensed, and must be operated in accordance with the strict conditions of the licences. One condition which, I understood, applies in every case is that the operator must keep sufficient stocks of inert material or suitable substitutes for use as a daily cover, that is to lay over the waste material which has been deposited during the course of a day's operation in order to contain it, so that it does not blow away in the wind, give off odours or otherwise create a nuisance. Items such as sheeting may be used but the preference, mainly because it is usually the least expensive method, is to use inert material such as soil or builders' rubble which is not suitable for re-use as aggregate. Inert material is also used for site engineering purposes, particularly the construction of roads within the site which lorries may use in order to reach the point at which their loads are to be discharged.
4. In addition to landfill sites, WRG operates about 25 transfer stations and 60 civic amenity sites, none of which is a landfill site. They are, instead, facilities at which waste is accepted before it is sorted and either sent for recycling (WRG has some recycling facilities of its own which are not relevant to this appeal) or to one of WRG's landfill sites. The transfer stations accept waste from local authorities and businesses, in exchange for a charge. The amenity sites are run pursuant to agreements between WRG and the relevant local authority, which pays WRG for its services. Amenity sites accept waste from members of the public, who are not themselves required to make any payment.
5. WRG's terms of trade, and in respect of civic amenity sites its agreements with the local authorities, provide that, whether WRG is making a charge for accepting the waste, making a payment for material it needs which is in short supply, or taking the waste without payment on either side, title in the waste materials passes to WRG on acceptance of the waste on site. Although the precise terms differ from one site to another, their effect is the same. Thus once material has been brought to a site, whether it is a landfill site, a transfer station or an amenity site, WRG may deal with that waste as it wishes, though it may be constrained to some extent by the terms of its site operating licence and any agreement with the relevant local authority into which it may have entered.
…
8. It was common ground that the disposals with which I am concerned were made on or after 1 October 1996, by deposit “on the surface of the land” at landfill sites of which WRG is or was the operator and that they were all of “qualifying material”. The question is whether the disposals were “of material as waste”, so as to come within sections 40(2) (a) and 42(2), as the Commissioners maintain, or they warrant a different description, as WRG contends, such that they do not attract liability for tax at all. Historically, WRG has accounted for landfill tax at the lower rate on all the inert material it receives at its sites. When the material was brought directly to the site by a customer, the tax due was calculated (by reference to the weight of material and its classification as qualifying material liable to the reduced rate, or other material attracting the full rate) and WRG accounted for the tax so calculated to the Commissioners. So much of the material deposited at transfer stations or amenity sites as could not be recycled or disposed of in some other way was removed to one of WRG's landfill sites, and, in the case of qualifying material, an internal charge of £2 per tonne was raised, representing the tax for which WRG was liable to, and did, account to the Commissioners. I understand a similar arrangement was made in respect of non-qualifying material, but I am not concerned about that material in this appeal.
9. It was WRG's coming to the conclusion that some of the inert material it has accepted on its landfill sites was not in fact liable to tax which led to its claim for a refund. I am now required to decide whether, in principle, it is right, and to do so in respect of each of the eleven categories of material which the parties have identified for this purpose. It is hoped that a determination in principle will enable them to resolve matters of detail themselves.
10. The eleven categories are as follows:
(a) purchased material
This consists of material bought by WRG from a supplier of inert materials- that is,...
To continue reading
Request your trial
- Waste Recycling Group Ltd v HMRC
-
Biffa Waste Services Limited v The Commissioners For Her Majesty's Revenue & Customs, TC 06442
...[38] and [50]), to the effect that a finding of material being discarded as waste renders irrelevant any question of its potential 18 [2007] EWHC 3014 (Ch), [2008] STC 1037 37 future usefulness. The underlying question remains as to whether the material in question, when it was finally empl......
-
Devon Waste Management And Others v The Commissioners For Her Majesty's Revenue & Customs, TC 06441
...and inspecting to take out the large, hard and sharp objects so as to make the fluff usable, or they were using all of the waste 22 [2007] EWHC 3014 (Ch), [2008] STC 1037 35 which means they are simply putting landfilled waste to a useful purpose.” 116. We note that in the Court of Appeal i......
-
R (on the application of Biffa Waste Services Ltd) v Revenue and Customs Commissioners
... ... The Defendants are the Commissioners for Her Majesty's Revenue and Customs ("HMRC") ... 2 Biffa carries on business in the supply of waste disposal ... 15 In July 2008, in Waste Recycling Group v HMRC [2008] EWCA Civ 849 , CA (" WRG" ), the Court of Appeal held (applying the earlier ... ...