Tax investigation into landfill site

CARDIFF council is being investigated by HM Revenue and Customs over potentially under-declared tax relating to the city’s Lamby Way landfill site.

The investigation relates to a landfill tax assessment received by the council on April 1, 2015, for waste tipped at the site.

HMRC have said some of the materials disposed of should have had the standard rate of tax applied rather than a lower rate which is £80 less per tonne.

The council has so far spent £144,000 on external advice for the discussions with HMRC, and has enlisted auditing firm PricewaterhouseCoopers to try to prove the materials tipped were eligible for lower rate tax.

A council statement says: “Work is being undertaken to understand the quantity and nature of materials disposed of to demonstrate that the ‘qualifying fines’ regime does not apply.

“The council aims to respond to HMRC queries this month.

“Subject to this, and relevant HMRC rules, there is the risk that the council may be required to pay tax, as well as a penalty and interest on underdeclared tax.

“In the event of assessments being upheld the council would consider the merits of an appeals or mitigation process.

“Given the additional work required and technical nature of the assessment it is not possible to quantify or provide a reliable estimate of any liability at this stage.”

The council could also face four separate legal claims which could total £160,000.

The four claims, which are all in excess of £10,000, include allegations of unfair dismissal, disability and race discrimination, and breach of contract.

The council says it is “resisting liability” for some of the claims.