Households and organisations face increased waste disposal costs following 22% hike in landfill tax
Buried in Budget documents and not mentioned by the chancellor in his speech, are the details of a 22%* landfill tax increase in 2025/26. The announcement will continue to incentivise investment in more sustainable waste management infrastructure.
Jayne Harrold, tax partner at professional services firm Evelyn Partners commented: “Landfill tax has been undergoing RPI based increases for many years. It affects not just the cost of waste going to landfill, but also the cost of waste sent for alternative disposal such as energy from waste and recycling because landfill is the alternative route. It acts as a price signal in the market influencing all disposal costs.
“It can be expected that it will affect the cost of disposal for local authorities, businesses, and private householders who need to use a skip for any house clearance or building works. For a householder with just one tonne of waste in a skip the additional cost will be £22.45 plus the VAT at 20%, making it £26.94. This announcement will likely encourage individuals and organisations to consider more sustainable ways of disposing their waste in order to beat the tax hike.”
Meanwhile, separately the chancellor also announced a much expected new excise duty on vaping products and an increase in tobacco duty to discourage smoking and the uptake of vaping as an alternative in the creation of a smokefree generation. More than 50 countries globally have implemented a vaping tax.
The new duty will be effective from October 2026 and a consultation has been released today with proposals for the new tax. It will target the liquids used in vapes, and will have different rates of tax depending on the nicotine content of the liquid at £1 per 10ml bottle for nicotine free liquids, £2 per 10 ml bottle for those with the same nicotine or less than an average cigarette, and £3 per 10 ml bottle for high strength liquids which have a nicotine content which is higher than an average cigarette.
Jayne continued:“The move seems to be broadly welcomed by the industry, follows a similar structure to measures introduced in some other territories, and is obviously a good move in increasing the price of vaping products in an attempt to discourage smoking.
“For the producers and importers of liquids who will be required to comply, taxes with multiple rates can be complex and difficult to administer. Engaging with the consultation process and making representations to get a system that will work for them will be critical.”
*2025/26 standard rate £126.15 per tonne and lower rate £4.05 per tonne; 2024/25 rates are £103.70 per tonne and £3.30 per tonne.
