The average family in the UK faces an increase of over £28 in their council tax rates over the next three years following announcements in today’s Budget to increase the landfill tax rate.
Landfill tax will rise by £3 per tonne of landfill to £24 as of 1 April 2007. This will be followed by a rise of £8 per tonne to £32 in 2008 and a further £8 rise to £40 in 2009. With the average home generating between one and one and a half tonnes of refuse for landfill per year, we estimate this will cost the average family over £28 per year once all of the rises come into force.
Daniel Lyons, indirect tax partner at Deloitte said:
"It is unlikely that an increase of £28 in the average family’s outgoings will impact on individual behaviour. However, from the council’s perspective, this will really force them to ask the question whether landfill is the best method of waste disposal.
"Other avenues such as waste to energy or a more determined effort on recycling will have to be considered. We would encourage the Chancellor to fund councils to improve recycling facilities."
Elsewhere, the Chancellor only tinkered with environmental measures.
There were a number of measures targeting the motorist including a rise of vehicle excise duty to £400 for very high CO² emission cars. In addition, there will be changes to the basis of taxation on the capital cost of company cars from April 2008. This is expected to move to taxation on an emission basis.
For further comment from Daniel Lyons please call our Budget press hotline: 020 7007 3333.
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