What does section 19 of the Landfill Tax (Scotland) Act 2014 provide for?

Section 19 provides the framework for regulations that entitle landfill site operators to claim a tax credit when a debt arising from a taxable waste disposal becomes irrecoverable. This bad debt relief ensures operators are not permanently out of pocket for landfill tax paid on disposals where the customer fails to pay.

What conditions must be met to claim a bad debt credit under Scottish landfill tax?

Two basic conditions apply: the person must have carried out a taxable disposal of waste to landfill that gave rise to a debt, and that debt must have become bad either wholly or partly. Regulations may impose further conditions, such as a minimum elapsed period or evidence that reasonable recovery steps were taken.

What happens if a bad debt is subsequently recovered after a landfill tax credit has been claimed?

If a debt previously treated as bad is later recovered in full or in part, the regulations may require the operator to repay the credit or a proportionate amount. For example, if half of the original debt is recovered, half of the credit must be repaid, ensuring relief only applies to genuinely uncollectable amounts.

How is it determined whether a landfill tax debt qualifies as bad?

The regulations may include specific rules and objective criteria for deciding whether and to what extent a debt is bad. This is necessary because debt recoverability is not always clear-cut — a customer may face financial difficulty without being formally insolvent — so the rules provide certainty to the process.

Landfill Tax (Scotland) Act 2014 section 19

Credit: bad debts

Section 19 allows regulations to be made that give landfill site operators a tax credit when they are owed money for a taxable disposal and that debt turns out to be irrecoverable (a "bad debt").

Regulations may entitle a person to a landfill tax credit where they have carried out a taxable disposal and the resulting debt owed to them becomes bad, either in whole or in part.
Any such credit is subject to additional conditions that may be specified in the regulations.
If a debt that was treated as bad is subsequently recovered (in full or in part), the regulations may require the person to repay the credit or make a corresponding payment.
The regulations may set out rules for determining whether, and to what extent, a debt should be treated as bad.

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