Waste disposed of to landfill following the cleaning up of contaminated land was been exempt from landfill tax since the inception of the tax in 1996. This was to incentivise the cleaning up of contaminated land. However, the arrangement was also a market distortion in favour of landfilling the waste in question. This was reconsidered in 2008, especially as HMRC recognised that technological advances meant that decontaminating the waste onsite, with the possibility that the resulting material might then be put to a practical use, is often considered to be best practice.

The Government concluded that this incentivisation would be better served by extending land remediation relief (a relief from corporation tax), and has therefore decided to phase out the Exemption. The Government has said that the exemption will be brought to an end by 1 April 2012, to minimise the impact on projects already in train which have been costed to be economically viable on the basis of the exemption being in place.

Landfill tax is charged by weight and there are two rates. Inert or inactive waste is subject to the lower rate. Landfill tax is £40 per tonne rate for any standard rated disposal of active waste made, or treated as made, on or after 1 April 2009. Landfill tax for inert wastes is £2.50 tonne