Open Letter to the HMRC – Instant LOI Testing for Trommel Fines

To Whom it May Concern:

I am writing in response to the two draft statutory instruments and draft guidance regarding determining landfill tax liability through loss-on-ignition testing.

I wish to bring to your attention some options for carrying out the loss-on-ignition (LOI) testing regime which you may not have considered, and which may improve compliance with the regulation while reducing the overall burden on both landfill operators and waste producers of carrying out the testing regime. There exist a number of different analytical instruments which are capable of providing a LOI test which require very little expertise in laboratory techniques. Our company, ABLE Instruments & Controls Ltd, offers one such instrument, the Computrac MAX 5000XL. This analyser can accept a sample of landfill material and automatically calculate an accurate LOI result in as little as 30 minutes, with no additional sample handling, calculation, or expertise required.

We humbly suggest that the guidance on LOI testing be amended to allow for the use of properly calibrated instruments such as the MAX 5000XL for the purposes of calculating landfill tax liability. Using such instruments to calculate LOI results for landfill tax purposes would deliver significant benefits to government, landfill operators, and waste producers.

Benefits to government
Rapid, accurate sample analysis, performed at site, will ensure the correct amount of tax is being collected. It can take a week or longer to learn of a failed test at a third-party laboratory. With the MAX 5000XL, the results are available in about 30 minutes. This quicker result will greatly enhance the HMRC’s ability to collect the correct amount of tax, as in the following illustrative scenario:

For example, a waste producer has recently failed a LOI test and as such is being tested at a medium frequency of once per 500 tons. Suppose that this waste producer were to deliver a second failing load on Monday, June 1. Under the proposed law, this second failing load would move the waste producer into the high frequency testing category, necessitating an LOI test for each load. If the sample from Monday’s failed load is sent to a third party laboratory, the landfill may not learn of Monday’s failed load until the following Monday, June 8. In the intervening seven days, the waste producer could tip up to 500 more tons of failing material into the landfill at the exempt rate, resulting in an under-collection of tax revenue worth up to 38,750 pounds.

If, on the other hand, the landfill operator were able to learn of the failing load in 30 minutes instead of 7 days, the new, higher testing frequency required by the law could be enforced immediately, resulting in no loss of tax revenue.

Low analysis costs encourage frequent testing, ensuring the correct amount of tax is being collected. The cost per test using the Computrac MAX 5000XL is about 50 pence, compared with 10 pounds or more for laboratory testing. This makes it economically possible for landfills to test every load. This will be especially valuable in the early years of the new tax regime as waste producers continue to improve their processes.

Benefits to landfill operators
Rapid analysis enables more efficient operation. The cost differential between standard-rated waste and lower-rated waste may cause landfill operators or waste producers to request that their loads not be tipped until it has been confirmed that they qualify for the lower rate. If the test results take a week or longer to be returned, this could result in an increasingly large accumulation of waste containers at landfill sites, consuming valuable space, creating a backlog of work, and, if not managed successfully, reducing the overall rate at which the landfill can accept waste.

Rapid analysis reduces overall cost to comply with the law. The very low incremental testing cost of instruments like the MAX 5000XL quickly offset the initial capital outlay, resulting in a significantly lower overall cost of analysis and compliance over time.

Benefits to waste producers
Rapid analysis enables waste producers to respond more quickly to problems with their equipment. Because a result can be obtained in as few as 30 minutes, a waste producer will be able to remedy any cross-contamination problems up to one week earlier than if awaiting a result from a laboratory, during which time many tons of non-complying material will have been added to landfill.

Rapid analysis results in more predictable tax levies. Quick and economical on-site testing enables waste producers to be certain that any given load will qualify for the lower rate of tax, allowing them to manage their operating capital more efficiently.

For these reasons—better revenue collection, lower cost of compliance, and less non-complying material reaching landfill, among others—we urge Her Majesty’s Revenue and Customs to add direction to the draft guidance allowing for instruments such as the Computrac MAX 5000XL to be used for purposes of landfill tax liability assessment.

Sincerest regards,

Dave Quelch
Business Development Manager
ABLE Instruments & Controls
dquelch@able.co.uk