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Members might find it helpful to have more details about the landfill tax credit scheme, which was summarised in Richard Hird's article Money from Waste in the April 1999 issue of the Reporter. Landfill Tax is paid to HM Customs and Excise by operators of landfill waste disposal sites. Its primary purpose is to encourage a change in waste management by shifting the economic balance away from landfill disposal towards more environmentally sustainable alternatives. However, whilst in theory landfill disposal and the total tax paid would therefore diminish over time, the government has already announced that there will continue to be annual increases in the tax rate. The tax take (>£500m) and therefore the maximum tax credit (>£100m) are unlikely to reduce in the near future.
Tax credits: in keeping with this emphasis on environmental sustainability, site operators who make voluntary grants to environmental bodies for environmentally beneficial purposes may claim tax credits of 90% of the grants paid, but those credits cannot exceed 20% of their tax liability for the same (landfill) tax year. The (10%) balance of such grants has to be met either by the site operators, or by third parties such as local authorities, commercial companies or private individuals; it cannot be met by the organisation receiving the grant.
For landfill site operators to be able to claim tax credits, environmental bodies in receipt of grants must be registered with ENTRUST(1), a regulatory organisation which operates the scheme on behalf of HM Customs and Excise. The principal conditions for registration are that environmental bodies must be non profit-distributing (they need not have charitable status) and not controlled by a landfill site operator or a local authority.
Environmentally beneficial purposes include the protection of the environment by the maintenance, repair or restoration of buildings or other structures which are used for religious worship, or which are of historic or architectural interest (not necessarily listed); to which there is a reasonable degree of public access; which are not operated for profit; and which are in the vicinity of a licensed landfill site. Projects must be approved by ENTRUST. Registered environmental bodies constituted as environmental trusts may also use grants from landfill site operators to make payments to other registered environmental bodies for environmentally beneficial purposes.
A copy of the Landfill Tax Register of all the licensed landfill sites in the UK and their location is available free of charge from HM Customs and Excise(2). Registered projects must normally be within 10 miles or so of a licensed landfill site (which does not need to be active; a site has to be licensed for as long as it is still being monitored, which may be for up to 50 years after the last waste was tipped there). In sparsely populated areas that requirement can be relaxed. Moreover, the landfill site operator making the grant does not have to be the operator of the site which is close to the project. It is possible for a project in Scotland which is managed by an organisation based in London to receive a grant from a site operator in Cornwall. However, experience suggests that most individual site operators prefer to assist local projects; landfill sites have a poor image, and individual operators often see the constructive use of landfill tax credits as good public relations. Applicants and projects therefore have to be of interest to individual site operators.
Several environmental trusts have been established to formalise the grant-making procedures. In particular, successful applicants frequently do not need to secure third party (10%) contributions. Most environmental trusts are either funded wholly or mainly by one of the national landfill site operators; cover the area of a particular local authority; or have been set up to assist specific types of project. While such arrangements substantially reduce the scope for individual site operators to take a personal interest in particular environmental bodies and their projects, they do considerably simplify the application process.
There is no set definition of eligible expenditure. If projects are approved by ENTRUST, then up to 100% of all expenditure reasonably associated with those projects can be met by grants from landfill site operators or environmental trusts (it is possible for more than one operator and/or trust to offer grants to a single project). Such grants can also count as partnership funding, eg, for applications to the English Heritage / Heritage Lottery Fund Joint Scheme for Places of Worship. However, only 5% or so of all landfill tax credit grants so far made have been for buildings used for religious worship and buildings of architectural or historic interest; there is strong competition for funding both from 'green' projects and from waste management and recycling initiatives.
There is not much case law about the grant-eligibility of repairs to church organs. However, if organs are being repaired as part of wider-ranging programmes of repairs to churches, they should qualify as parts of buildings used for religious worship. In the case of projects which relate only to the repair of church organs, or organs which are in buildings not used for religious worship (including redundant churches), then it would be necessary to demonstrate that the churches or other buildings were of architectural or historic interest, and that the organs themselves were of historic interest.
Individual churches and owners of historic buildings can register as environmental bodies and apply for funding from landfill site operators and environmental trusts. The accounting procedures are no more onerous than those applying to any other scheme of grants. Nevertheless, it would be simplest if one or more landfill site operators was prepared to make grants to a recognised national body which could be registered as an environmental trust and which was empowered to give grants to churches and other buildings in which there were historic organs. BIOS will endeavour to identify such a source of finance, and would welcome suggestions from members who may be associated with, or know someone actively involved in, the waste disposal industry.
Further information:
1. ENTRUST's head office is at Suite 2, 5th Floor Acre House, 2 Town Square, Sale, |