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Notice LFT2 Reclamation of contaminated landJuly 2010

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Foreword

This notice cancels and replaces Notice LFT2 (April 2003).

Further help and adviceIf you need general advice or more copies of HM Revenue & Customs notices,please phone the Excise Helpline on 0845 010 9000. You can call between 8.00 amand 8.00 pm, Monday to Friday.

If you have hearing difficulties, please phone the Textphone service on 0845 0000200.

If you would like to speak to someone in Welsh, please phone 0845 010 0300,between 8.00 am and 6.00 pm, Monday to Friday.

All calls are charged at the local rate within the UK. Charges may differ for mobilephones.

Other documents on this or related subjects

Notice LFT1 A general guide to Landfill Tax

Form LT1C Contaminated land - application for a certificate of exemption

1. Introduction1.1 What is this notice about?

This notice explains the circumstances under which waste arising from thereclamation of contaminated land is exempt from landfill tax.

To gain the exemption the person carrying out the reclamation must apply to us. Ifthe reclamation qualifies we will issue an exemption certificate. This notice alsodetails the procedures for this.

A separate Notice LFT1 A general guide to landfill tax is available detailing thecircumstances when landfill tax applies to disposals of waste.

1.2 Who should read this notice?

This notice is for anyone (landowners, developers or contractors) carrying out areclamation of contaminated land. It will also be of interest to landfill site operatorswho expect to receive waste from reclamation sites.




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1.3 What law covers this notice?

Sections 43A and 43B of the Finance Act 1996 as inserted by The Landfill Tax(Contaminated Land) Order 1996 (SI 1996 No. 1529) exempt the disposal to landfillof waste resulting from the reclamation of contaminated land.

Nothing in this notice changes your obligations under environmental law.

2. Eligibility for exemption

2.1 What is a qualifying reclamation?

A reclamation will qualify for exemption if it is or will be carried out with the object of:

(a) facilitating development, conservation, the provision of a publicpark or other amenity, or the use of the land for agriculture orforestry, or

(b) reducing or removing the potential of pollutants to cause harm.

The reclamation must also meet certain conditions in order to qualify for theexemption - see paragraph 2.2 for details of these conditions.

Note: Where we refer to reclamation for the purpose of “development” in this notice,we mean any reclamation falling within category (a) above.

2.2 What are the conditions?

2.2.1 General conditions

For both categories of reclamation, the following conditions must be met.

Condition

1. Reclamation must involveclearing the land of pollutants

that are causing harm or havethe potential to cause harm.

You must be able to demonstrate that there arepollutants present which are:

• polluting ground or surface water

• harming the health of people, animals orplants, or

• damaging the fabric of structures orservices

or have the potential to do so.Reclamation of land which is merely derelictbut not polluted will not qualify for exemption.You do not necessarily need to be clearing all

of the pollutants from the land to qualify forexemption.




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2. The cause of the pollutionmust have ceased.

The only exception to this is where the pollutionis being caused by someone or somethingoutside your control. In such cases you shouldcontact the Excise Helpline, phone 0845 0109000.

3. The land is not subject to aworks or remediation notice.

The exemption will not apply where theremoval of the material is required in order tocomply with a notice or order unless thereclamation is being undertaken by or on behalfof certain bodies – see paragraph 2.3 forfurther details.

2.2.2 Additional condition

Where the purpose of the reclamation is development, the following condition must

also be met:

Condition

The reclamationconstitutes or includesclearing the land ofpollutants which would(unless cleared) preventthe land being put to theintended use.

You must be able to demonstrate that the pollutants haveto be removed because their potential to cause harm (seecondition 1 of paragraph 2.2.1) would prevent the landbeing put to the intended use, were they to remain.We will not accept claims that, though the pollutants fallbelow the limits generally recognised as safe for theintended use for the land, they have to be removed for

other reasons, for example, because:

• the soil structure is unsuitable for buildings

• those providing the financial backing for thedevelopment demand their removal

• the waste can not be used on-site forlandscaping/backfilling, or

• the site level needs reducing.

2.3 What if material is removed to comply witha notice or order?

The exemption does not apply where the removal of material is required to complywith:

• a works notice served under section 46A of the Control ofPollution Act 1974

• a remediation notice served under section 78E of theEnvironmental Protection Act 1990




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• an enforcement notice served under section 90B of the WaterResources Act 1991

• a works notice served under section 161A of the WaterResources Act 1991

• an enforcement notice served under regulation 24 of thePollution Prevention and Control (England and Wales)Regulations 2000

• a suspension notice served under regulation 25 of thoseRegulations

• an order under regulation 35 of those Regulations

• an enforcement notice served under regulation 19 of the

Pollution Prevention and Control (Scotland) Regulations 2000

• a suspension notice served under regulation 20 of thoseRegulations, or

• an order under regulation 33 of those Regulations.

However, this condition does not apply to land being reclaimed by or on behalf of anyof the following:

• a local authority

• a development corporation

• the Environment Agency

• the Scottish Environment Protection Agency

• English Partnerships

• Scottish Enterprise

• Highlands and Islands Enterprise, or

• the Welsh Development Agency.

Any applications from the above organisations will have to satisfy all the otherqualifying conditions in this section for the exemption to apply.




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2.4 What is the definition of land for thepurpose of the exemption?

The definition of land includes buildings standing on contaminated land and

contaminated buildings themselves (whether or not they stand on contaminatedland). You can therefore apply for exemption certificates for land, buildings and land,and buildings only.

2.5 Reclamation or construction?

Only waste arising from reclamation qualifies for exemption. Waste arising fromconstruction activity does not qualify. Sometimes it may not be clear whether theactivity which will give rise to the waste amounts to reclamation, prior to construction,or to construction activity itself. In these cases we will take various factors into

account in determining the extent to which reclamation is taking place.

These include:

• whether the developer’s plans identify a clear intention toremediate prior to the commencement of construction

• whether the amount of material being removed relates to thatnecessary to deal with any pollutants or only to that which needsto be removed for other reasons, for example reducing site levelsor instability of made ground, and

• whether material is to be removed only from the constructionarea itself, leaving similar pollutants below or alongside, withoutdealing with them in some way, or from an area sufficient toremove any potential for harm.

Some examples of projects that we would and would not regard as reclamation canbe found in sections 7 and 8 to assist you.

In many projects of reclamation, spoil is removed in order to remove pollutants whichwould have to have been excavated in any case to level land or to dig foundations or

service trenches. If we are satisfied that what is taking place is reclamation, then thewaste arising from that work would all be exempt, even though it would have beenremoved in any case as part of the later construction.

2.6 How to identify reclamation wastes

The exemption only applies to reclamation wastes. Once the qualifying conditionshave been met you will need to identify and quantify these wastes. The followinggeneral rules apply.

If… then…

Pollutants are present in only Only the wastes arising from reclamation of this




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part (or parts) of the site area qualify for exemption. The contaminated areaand amounts of waste arising from its clearanceshould be clearly identified when applying forexemption.

Pollutants are presentthroughout the site but not allneed to be removed fordevelopment to proceed

If:

• reclamation is taking place with a view todevelopment, and

• the nature of the intended development is suchthat the level of pollutants would (unlesscleared) prevent it proceeding in some areas butnot others (for example they are abovethresholds for garden or open space areas butnot those for buildings)

then only the wastes from areas where it is

necessary to remove the pollutants will qualify forexemption.

Pollutants are presentthroughout the whole site at alevel where reclamation isnecessary in all areas

If the nature of the development is such that thelevel of pollutants would prevent the developmentfrom proceeding in all areas of the site, all wastesarising from the reclamation will qualify forexemption.

There are small areas of nonqualifying land present on thesite

We recognise that there may be instances wherethere are small areas of:

• clean material, or• land which is contaminated, but not to a level

that requires its removal,dispersed between areas of contamination and itwould not be practicable to separate wastes arisingfrom such land during the reclamation.You can include such wastes in your application,provided that they amount to less than a quarter ofthe total waste applied for.

It is necessary to remove cleanor non qualifying land in orderto get to the pollutants

If you can prove to us that as part of thereclamation, in order to get to the pollutants, youmust remove clean land, or land which iscontaminated but not to a level that requires itsremoval, you can include these wastes in yourapplication.

The only practical or safe wayto remove pollutants is to addmaterials to them, for exampleadding ash to tar to bind it

You can include the weight of these materials inyour application.




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3. Expiry of the exemption

3.1 When does the exemption expire?

The exemption automatically expires once pollutants have been cleared to the extentthat they no longer prevent development, conservation, provision of a public park etcor the potential for harm has been removed. Where a reclamation is carried out tofacilitate construction of a building or civil engineering work, the exemption willautomatically expire, in respect of that part of the land which relates to theconstruction, when the construction commences.

3.2 What if it’s a phased development?

If construction has commenced on one phase, it will not prevent waste produced

during the clearing of pollutants from a later phase from qualifying for exemption,provided that the clearance is necessary to facilitate further development. In the caseof large developments involving several phases over a long period we request thatyou submit separate applications for each phase (apply separately for each phase atleast 30 days prior to its commencement).

3.3 Discovery of further pollutants

There may be occasions where you discover further unexpected pollutants that makefurther reclamation necessary before construction can proceed. In such a case you

should make application for an extension to your certificate to cover the additionalwaste that has to be removed to landfill (see paragraph 5.2). You will need to submita revised plan and calculations which clearly show how the new figure has beenarrived at.

4. Applying for exemption

4.1 Who should apply?

The person carrying out, or intending to carry out the reclamation of the

contaminated land should apply for the exemption. This would normally be thelandowner, developer or main contractor. If you appoint an agent to act on yourbehalf, the application must be completed in your name and be accompanied by yourwritten authority.

4.2 How to apply

Please phone the Excise Helpline on 0845 010 9000 who will send you form LT1CContaminated land - application for a certificate of exemption. Form LT1C is alsoavailable on our website, go to www.hmrc.gov.uk.




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Once you have completed form LT1C please send it with the required evidence (seeparagraph 4.4) to the Landfill Tax Processing Unit at:

HM Revenue & CustomsDobson House

Regent CentreGosforthNewcastle-upon-TyneNE3 3PF

4.3 When to apply

Step Action

1 Apply at least 30 days before you intend to start removing the waste tolandfill.

2 If you have to clear the land within 30 days, for example if you uncoverpollutants on a site you believed to be clean, you should mark yourapplication clearly showing the deadlines you are hoping to meet andexplaining why you have been unable to make the normal thirty dayapplication. In such cases we will make every effort to assist you.

Note To enable us to process your application quickly, you must supply all theinformation requested on the form and all the accompanying evidence tosupport it (see paragraph 4.4).

Important: the law does not allow us to issue backdated certificates so any wasteremoved before a certificate is issued will not be exempted.

4.4 Evidence to support your application

You will need to provide the following evidence with your application. We may alsorequest further information. If you do not provide all the information we need, issue ofthe certificate will be delayed.

Evidence required… Including…

1. Details of the pollutants Evidence to demonstrate that there arepollutants that are causing or have thepotential to cause harm.If reclamation is for the purpose ofdevelopment then evidence must alsodemonstrate that failure to remove thepollutants would prevent that developmentfrom taking place.Such evidence could include:

• site investigation report, detailingpollutants, potential pathways and




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targets

• reference to recognised guidance oncontaminated land redevelopment, and

• any correspondence with environmentalagencies.

2. Calculation of the weight ofwaste which has to be removed

• Full details of how the weight of wasteto be removed has been calculated.These should be clearly linked to therecommendations of the siteinvestigation report and the plan of thecontaminated area (see 3 below).

• Evidence to demonstrate that this isonly waste arising from the reclamationstage and does not include any wasteproduced after the pollutants have beencleared.

3. Location of the contaminatedland

• Copy of the site plan with full postaladdress, Ordnance Survey gridreference and Land Registry number (ifapplicable). The boundaries of the siteand the areas of contamination within itshould be clearly identified on the plan.

• Cross-sections of the land, showing theextent, type and depth of pollutantsthroughout the site, if available

4. Action plan for development For reclamations that involve development:

• A simple action plan showing a clearintention to remediate.

• Estimates of expected dates that eachstage will begin and end, the workinvolved and the amount of wasteattributable to each.

4.5 What happens after I submit myapplication?

On receipt of your application we will take the following action:

Step We will…

1 Allocate it a unique reference number which you should quote in any furthercorrespondence.

2 Send you an acknowledgement and tell you which office is dealing with yourapplication.

3 Contact you and may ask for additional information.




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We may also visit the site of the reclamation and make any other enquiries.

4 Issue the certificates once we are satisfied that the reclamation qualifies forexemption. (See section 5 for further information about certificates.)

5 Write to you explaining the reasons if we find it necessary to refuse yourapplication or reduce the tonnage requested.

If you have any queries regarding the details of your application you should contactthe officer dealing with it.

4.6 What if I don’t know the details of thelandfill sites and dates of reclamation?

This table shows what you need to do and what happens then.

Step Who… Does what…

1 You • make the application without delayThis is important because the law does not allow usto backdate certificates, so any waste removedbefore a certificate is issued cannot be exempted.

• photocopy section 3 of form LT1C

• complete and sign form LT1C, and

• send it to the address in paragraph 4.2, enclosing all thesupporting evidence with it.

2 We will then • follow the procedure in paragraph 4.5, and as long as allthe other essential information is produced

• issue Part A of the certificate3 You - once

you knowdetails of thelandfill sites

Use the photocopy of section 3 of form LT1C to notify theofficer who dealt with the application of:

• the designated landfill sites and details of the operator

• the weight of waste to be disposed of at each site, and

• the dates from which disposals authorised under theexemption will commence.

4 We will then Issue Part B certificates to the nominated site(s).

5. Certificates

5.1 Issue of certificates

The certificate is in two parts:

Part A (issued to the applicant).




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This certifies that the land identified in the application is deemed to be contaminatedfor the purposes of landfill tax. Our office dealing with your application should alreadyhave written to you advising the areas of the site and types and amounts of wastearising from reclamation to which the exemption will apply.

Part A of the certificate does not by itself entitle a site operator to exempt thedisposal of waste.

Part B (issued to each of the landfill site operators nominated by you)

You will also receive a copy of each Part B. The original Part B authorises the siteoperator(s) to exempt waste from a specified area of contaminated land.

It will detail:

• the contaminated land

• the landfill site authorised to accept the waste

• the date from which waste may be exempted, and

• the maximum weight of waste from the reclamation that may beexempted at that landfill site.

Do not move waste to landfill until you have told us which sites you havenominated to receive the waste and certificates have been issued to these sitesadvising them of what tonnages they can accept for exemption. You willreceive copies of these certificates to let you know this has been done.

5.2 Amendments to certificates

It may become necessary to amend the Part B certificates at some stage because:

• you have discovered further pollutants giving rise to additionalwaste

• changes in the proposed end use of the site, mean that you needto remove pollutants from areas that would not otherwise have

required it, or

• you need to amend the details of landfill sites to be used.

Any changes that will need an amendment to a Part B certificate must be notified inwriting to the officer who dealt with your application. You should do this before anyadditional waste is landfilled at any of the nominated sites. Provided that the officer issatisfied with the information received, he/she will authorise the issue of a variationcertificate. We do not require a further period of thirty days to make suchamendments; we will normally process an amendment within five working days ofreceiving your notification.




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You must inform us immediately of any changes that could affect the validity ofthe certificate, quoting the number of your original certificate.

5.3 Completion statements

As soon as the reclamation is finished you must send the officer who dealt with yourapplication a completion statement summarising, by each landfill site used:

• the start and finish dates of the qualifying disposals, and

• the total tonnage disposed of.

We periodically review exemption certificates to ensure applications are finalisedwithin an identified period of exemption.

5.4 Withdrawal of certificatesWe can withdraw certificates where:

• it is necessary to protect the revenue

• we discover the reclamation did not in fact qualify for theexemption

• no disposals of the material from the certified land take place, or

• an enforcement notice is served and the certificate holder is notone of the bodies listed (see paragraph 2.3).

However we would only refuse to issue a certificate for land that meets the qualifyingconditions for the protection of the revenue, or where an enforcement notice is inforce.

5.5 Reviews and appeals

If we decide to:

• refuse the issue of a certificate

• limit your certificate to only part of the land covered by yourapplication, or

• withdraw your certificate,

You can seek a review (and subsequently appeal to a VAT and Duties Tribunal ifnecessary). The procedure is explained in the reviews and appeals section of NoticeLFT1 A general guide to landfill tax.




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6. If you are a landfill site operator

6.1 Issue of certificate

We will issue the relevant Part B of the certificate to each nominated landfill siteoperator.

6.2 What the certificate authorises

This authorises the maximum weight of waste from the contaminated land that canbe exempted upon disposal at that particular site.

The certificate will also specify the date from which the certificate is effective. Anywaste received prior to this date is not subject to exemption and you must

account for tax on it.

6.3 Your responsibilities as a landfill siteoperator

If you have been authorised to exempt waste from an area of contaminated land, youmust agree procedures with those reclaiming that land to ensure that only qualifyingwaste is exempted.

For example, by ensuring:

• waste transfer notes/weighbridge tickets identify the reclamationsite that the waste comes from, and

• waste transfer notes include a cross reference to the exemptioncertificates.

You can find further details of your responsibilities in Notice LFT1 A general guide tolandfill tax.

6.4 What happens when the authorised amountis exhausted?

Once this amount has been exhausted you must charge tax unless you havereceived an amended certificate from us.

Once a reclamation of contaminated land has taken place, the applicant is requiredto provide us with a statement detailing the quantity of qualifying waste which hasbeen disposed of at your landfill site. We will expect this to accord with yourexemption disposal record.




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7. Examples of eligible reclamation projects

7.1 About these examples

Please note that these examples are only to be taken as illustrative of ones whereexemption may apply. Each case will be treated on its own merits and similarity toyour circumstances is not to be taken as an indication that exemption will apply.

7.2 Example 1

A football pitch is being developed on the site of a disused cokeworks. The area tobe developed contains a number of pollutants (including various metals, polyaromatichydrocarbons and tar). These exceed the threshold levels for parks and open spacesthroughout the site and a condition of the planning approval is that they must be

cleared before any development can take place. The consultant surveyors haverecommended that material be removed to a depth of 1.5 metres to remove thepotential for harm, a strategy agreed by the planning authority. This will take placebefore any construction work commences.

The waste removed will qualify for exemption. It is clear that a reclamation ofcontaminated land is taking place. This involves the removal of pollutants which, ifnot cleared, would prevent the development from proceeding.

7.3 Example 2

An industrial unit is to be constructed on the site of a former unlicensed tip whichcontains domestic waste. Surveys commissioned by the developer show that due tothe lack of control over tipping at the site when it was operational there is a danger ofleachate polluting the groundwater and gas emissions which could present a realdanger to future employees unless the pollutants are removed.

The waste removed in clearing the land of pollutants will qualify for exemption. It isclear there is a potential for harm and that the development cannot proceed withoutremoval of the pollutants. It does not matter in these circumstances whether or notthe developer had to remove more waste than would have been removed in any case

to reduce site levels.

7.4 Example 3

A housing development is to be constructed on a site polluted by previous industrialuse. The whole site is contaminated with polyaromatic hydrocarbons, which exceedthe ICRCL levels for gardens/play areas but not those for buildings, landscapedareas or hard cover.




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The site qualifies for the issue of an exemption certificate because removal of thewaste from gardens/play areas is necessary for development to proceed. However,we would restrict the exemption to only the gardens/play areas as removal from otherareas is not required as a result of the presence of pollutants. But if the vast majorityof the site is covered by the reclamation of the gardens/play areas, we would grant

exemption to the whole site.

7.5 Example 4

A disused factory is being demolished prior to development of the site for shelteredhousing with landscaped areas. Asbestos is found in the roof and internal walls of thefactory.

In this case the asbestos waste cleared from the building will qualify for exemption.

8. Examples of ineligible projects

8.1 Example 1

A site to be developed was formerly used as a tip for construction waste. The wasteis largely inert and there is no evidence that there are pollutants present with apotential to cause harm but the waste is to be removed anyway because the groundis too unstable to support the planned construction.

This will not qualify for exemption as it does not involve the removal of pollutants with

the potential to cause harm.

8.2 Example 2

A motorway is being constructed through an area of land that containscontamination. This exceeds threshold levels for domestic gardens but not those forbuildings or hard cover. Planning conditions dictate that in order to “hide” the roadfrom view of local residents it will be built in a deep cutting. No more waste is beingremoved than is required to meet this condition and similar contamination is being lefton either side of the section being removed.

This will not qualify for exemption because there is no evidence that removal ofpollutants is necessary before construction can commence.

How we use your information

HM Revenue & Customs is a Data Controller under the Data Protection Act 1998.We hold information for the purposes specified in our notification to the InformationCommissioner, including the assessment and collection of tax and duties, thepayment of benefits and the prevention and detection of crime, and may use thisinformation for any of them.




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We may get information about you from others, or we may give information to them.If we do, it will only be as the law permits to:

• check the accuracy of information

•

prevent or detect crime

• protect public funds.

We may check information we receive about you with what is already in our records.This can include information provided by you, as well as by others, such as othergovernment departments or agencies and overseas tax and customs authorities. Wewill not give information to anyone outside HM Revenue & Customs unless the lawpermits us to do so. For more information go to www.hmrc.gov.uk and look for DataProtection Act within the Search facility.

Do you have any comments or suggestions?If you have any comments or suggestions to make about this notice, please write to:

HM Revenue & CustomsLandfill Tax Team, Tax Practice3rd Floor WestRalli Quays3 Stanley StreetSalfordM60 9LA

Please note this address is not for general enquiries.

For your general enquiries please phone the Helpline on 0845 010 9000.

Putting things right

If you are unhappy with the way we have handled your affairs (because of delays ormistakes, for example) please tell the person or office you have been dealing with. Ifthey are unable to sort things out, ask for your case to be referred to the complaints

team.

For further information about our complaints procedures go to www.hmrc.gov.uk and under ‘quick links’ select ‘Complaints’.

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