EDITOR'S NOTE: Since the following article was written, the Landfill Tax Credit Scheme has been replaced by the Landfill Communities Fund. The regulatory body for the fund is Entrust.


The Landfill Tax Environmental Credit Scheme

Francis Golden


Since 1996 landfill operators have had to charge Landfill Tax on waste deposited on their sites. To the great surprise of Customs and Excise, who had to implement the new tax, the landfill operators were allowed by the Government to make regular donations to a variety of approved 'environmental' bodies for certain types of projects in lieu of handing the tax over to Customs and Excise. As well as supporting the protection of the natural environment, projects were allowed to benefit where they supported the 'protection, maintenance, repair, restoration of a building or other structure which is a place for religious worship or of historical or architectural interest, open to the public and situated in the vicinity of a landfill site'.

Miniscule requirements for eligibility opened the door for a tidal wave of applications which have benefited churches and cathedrals throughout the UK, the sums realised being either one-off payments of a few hundred to a hundred thousand pounds, or a continuous series of payments as work progressed.

In the year 2000 the total tax raised by the landfill operators was about £84 million, of which approximately £7.1 million went towards the costs of restoring and repairing churches, chapels and buildings of architectural or historic interest.


To qualify for funding under the Landfill Tax Credit Scheme, there has to be a degree of match funding by a third party. The requirement is a little complex. The landfill operator can credit the Landfill Tax due to Customs and Excise with 90 per cent of a donation to an enrolled 'environmental' body (such as a church), but that credit has to be a maximum of 20 per cent of the tax due. For example:

Landfill Tax due to Customs
Credit claimed @ 20% by landfill operator
Net paid to Customs by landfill operator
= 8,000
As only 90% of the landfill operator's donation can come from the credit, the actual donation made is £2,222 (credit x 100/90):
Donation by landfill operator to good cause
Tax credit
= £222

The shortfall (in this case £222) may be carried by the
landfill operator, but all landfill operators (in the experience
of the author) expect to be recompensed for the amount. Under the rules, this element of the funding has to come from a third party. It cannot be paid by the beneficiary.


  • Landfill operators are under no obligation to give any donation.
  • Although there is no requirement for funding to come
    from the landfill operator of the site which is nearby,
    many operators will only donate to buildings in the vicinity of their own site.
  • Where third party funding is to be obtained, applications made to different organisations must address the specific funding criteria of each.
  • Organisations should find a donor to make a commitment before registering in case they are unable to gain funding from the landfill tax operators, wasting their £100 registration fee.

At present 31 per cent of tax credits goes to recycling waste. In the 2001 budget, the Chancellor expressed a wish that this should be increased. Since then an 'indicative target' of 65 per cent of landfill tax credits has been allocated to sustainable waste management projects, with a third of tax credits within this category allocated specifically to recycling projects (House of Commons Hansard Written Answers for 10 May 2001). No reduction in the amount available for historic buildings and churches has been suggested, but we will need to keep an eye on future Budget reports.

Further Information
To enrol as an environmental body contact:
Entrust Tel 0161 972 0044

For a list of landfill operators in the UK contact:
Customs and Excise Tel 0845 0109000



This article is reproduced from The Building Conservation Directory, 2001


FRANCIS J GOLDEN is a former Customs and Excise Senior Executive Officer. He advises on VAT on works to listed buildings and on applications under the Landfill Tax Credit Scheme.

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