Module 12 Environmental taxation and relief Flashcards
What is the purpose of environmental taxes and reliefs?
To provide an incentive for businesses to use resources efficiently and discourage those practices that damage the environment
What are the four environmental taxes in TC level?
Aggregates levy
Climate change levy
Landfill tax (including devolved variations)
Vehicle and fuel duty
What is aggregate levy?
It is a tax on the commercial exploitation of sand, gravel and rocks that is dug from the ground or dredged from the sea in the UK.
Designed to address the environmental damaged caused by these activities/businesses
Exporters of Aggreates receive relief from the levy.
Certain materials are excluded from the tax:
Coal, lignite, shale, slate, clay, industrial minerals, soil and vegetable (or other organic) material, blocks of stone and limestone for the production of lime and cement
What is the Landfill tax?
Taxes on the disposal of waste to landfill sites, designed to encourage businesses to produce less waste and to use alternative forms of waste management
The landfill tax is paid to HMRC by landfill site operators who will recharge them to local businesses and local authorities along with normal landfill fees
Scottish Landfill tax (Scotland) and Landfill disposals tax (wales) operate the same tax rate as the landfill tax.
Lower rate applies to inactive waste - rock and soil
Standard rate - everything else
Some wastes are exempt from landfill tax (some dredging activities, quarrying, mining and clearing up unauthorised disposals from other sites).
Landfill tax is not due on household waste
HMRC may prescribe areas for material pending sorting/removal/recycling - information area (no tax due)
What situation will landfill operators be due a tax credit from the landfill tax?
If landfill operators pay tax on a disposal which is then sent for recycling, incineration or reuse or to another landfill site
What is the landfill communities fund?
A tax credit scheme, landfill site operators can claim a credit of 5.3% and this credit is passed to the environmental body and represents 90% of the contribution made by the operator to that body, the other 10% can be paid by operator or another third party.
What is the climate change levy
A levy designed to encourage businesses to reduce their energy consumption.
Two rates: CCL and Carbon price support (CPS)
CCL paid by commerical and industrial users of energy to their supplier who then pay the HMRC
CPS paid by the operators of power stations
What energy products when used as fuels does CCL apply to?
Electricity Natural gas supplied by gas utility petroleum and hydrocarbon gas in a liquid state coal and lignite coke semi-coke of coal or lignite petroleum coke
What are the rules for energy intensive businesse?
Energy intensive businesses can get a reduction on the main rates of CCL if they have entered into a climate change agreement (CCA) with the environment agency.
90% reduction for electricity and a 65% reduction for gas, LPG, coal and other solid fuel
What is exempt under the CCL?
Supplies are exempt from levy
Supplies not for burning or consuming in the UK
supplies from certain combined heat and power schemes
Users of renewable sources of energy are exempt from CCL - true or false?
False
What are the four direct soruces of vehicle and fuel taxation?
Vehicle excise duty (VED)/ road tax - Zero emission cars pay zero road tax
Fuel duty - this is added onto the price of petrol, disel, biodiesel and bioethanol by retailers, VAT is then added to give the final price paid by consumers.
Congestion charging - payable when driving into central london and certain streets in Durham.
Road pricing (toll charges) - M6 toll road, Dartford Crossing
What is the rule around low emission zones in London?
Low emission zone also exist in Greater london for commercial vehicles that do not meet EU emission standards (buses/coaches over 5 tonnes, lorries over 3.5 tonnes, caravans and various other commercial vehicles)
Applies for personal and commercial use.
What are tradeable permits?
Issued by Government agencies to provide an efficient and flexible means of achieving environmental targets.
The permit sets out the limit for pollution or output to a predefined limit.
These are tradeable among other businesses
What are the three conditions for the tradeable permit scheme to be successful?
Polluters must have sifficiently different costs for there to be potential trading
Polluters should trade if such potnetial exists, therefore transaction costs need to be relatively low
It must be possible to move emissions without serious environmental implications (carbon is an example where the location of emissions is unimportant) (Diffuse water and phosphate pollution the location is important)
