MAR 2018: Zoning in on the Landfill Communities Fund

If you’ve ever researched into applying for the Landfill Communities Fund (LCF), there’s a good chance you’ve spent some time researching how the scheme operates and if your project is eligible. This month, we highlight the key points to consider before applying…

The LCF, regulated by ENTRUST on behalf of HMRC, is a private tax credit scheme enabling Landfill Operators (LO) to voluntarily donate a percentage of their landfill tax (a tax which is to be paid to HMRC for every tonne of waste they put into landfill) to Distributive Environmental Bodies (DEB).

Six DEBs in Kent currently distribute funds on behalf of LOs to not-for-profit organisations who deliver projects for the benefit of communities and the environment in the vicinity of a landfill site. They are: Biffa Award, Enovert Community Trust, Ibstock Enovert Trust, SUEZ Communities Trust, Veolia Environmental Trust and Viridor Credits Environmental Company. Derbyshire Environmental Trust also offer the LCF in Kent, however this is through the Biffa Award.
 
Each DEB is entitled to set their own eligibility criteria, objectives and priorities, but they must adhere to those set out in The Landfill Tax Regulations 1996 (Regulations). They are:

1. PROJECTS MUST COMPLY WITH ONE OF THE OBJECTIVES (‘OBJECTS’)
The five Objects are:

Object A: The Reclamation, Remediation Or Restoration Of Land Which Cannot Currently Be UsedThe project site is where there once was an activity which has now ceased, which prevents or restricts the current use of the land, e.g. the site may have been contaminated. For example, construction of a footpath on a closed railway line.

Object B: The Prevention Of Potential For Pollution Or The Remediation Of The Effects Of Pollution
The project seeks to clean up land that has ceased activity and is polluted. Project example, decontaminating and demolishing an abandoned wharf.

Object D: The Provision, Maintenance Or Improvement Of A Public Park Or Another Public Amenity
The project site must be open and accessible to the general public (minimum 104 days per year) without a view to profit. Project example, improvements or construction to a village hall or play park.

Object DA: The Conservation Or Promotion Of Biodiversity
The project seeks to protect, restore or enhance natural habitat and those species living there. Project example, installation of bird nest boxes or tree planting.

Object E: The Restoration Of A Place Of Religious Worship Or Of Historic Or Architectural Interest
The project seeks to preserve, maintain, restore and/or repair a building of historical or architectural significance. The site must be open to the general public (minimum 104 days per year). Project example, repairing a roof or improving disabled access. 
DEBs can select which Objects they wish to support. Find out which Objects Kent DEBs support here.

2. PROJECTS MUST BE WITHIN A TEN MILE RADIUS OF A LICENSED LANDFILL SITE
A licensed landfill site is any site that is issued with a Waste Management License Number. The status of that license is not considered. However, a DEB can still set their own conditions on eligible project site locations in conjunction with ENTRUST’s, so we recommend checking. See individual DEB guidelines below.

3. APPLICANTS ARE REQUIRED TO ENROL WITH ENTRUST AS AS ‘ENVIRONMENTAL BODY’ (EB)
Corporate bodies, such as limited companies, and unincorporated bodies, such as associations, clubs or trusts, are all eligible to enrol as an EB as long as they are not-for-profit and based in the UK. EBs must not be controlled by the local authority or a LO. The term ‘environmental’ does not define the type of organisation that can enrol.

Becoming enrolled is subject to approval from ENTRUST and can be done on the ENTRUST website. A payment of £100 is also to be made. There are ongoing obligations EBs must adhere to such as, submitting an annual return, informing ENTRUST of any LCF awards you receive and sending updates on your projects. This is all done through your account on ENTRUST’s website.

EBs who are enrolled for more than three years will be eligible to apply for an additional grant through a DEB. The Small Grants Scheme (SGS) can be used for projects under Object D and allows a DEB to make a number of small grants, up to £5,000 each, under a single, umbrella project registration with ENTRUST. A SGS registration is for one year only (1 April to 31 March). 

Note, if you applying for funds through a DEB you may not have to enrol as they sometimes do it on your behalf. See individual DEB guidelines further down.

4PROJECTS MUST BE APPROVED BY ENTRUST
Before any LCF monies can be spent, projects must be approved by ENTRUST to ensure expenditure is in compliance with their regulations. To seek approval, an online project registration application form must be submitted through your ENTRUST account. Decisions are made within five working days.

If you are applying through a DEB, they may register your project with ENTRUST on your behalf.

5. PROJECTS ARE ELIGIBLE TO PAY THE CONTRIBUTING THIRD PARTY (CTP) PAYMENT
When a LO makes a contribution to a DEB it can only claim tax relief on up to 90% of the contribution it makes and is left with a 10% funding shortfall. Some LOs will absorb this cost, or a portion of it, themselves. Some will require you to find a separate third party to make the 10% payment or a portion of it. A CTP must meet ENTRUSTs requirements:

  • CTPs must be legally separate from the applicant;
  • CTPs cannot use any LCF money;
  • CTPs cannot gain a unique benefit from any LCF expenditure; and
  • CTPS must make the payment directly to LO or follow ENTRUSTs intermediaries guidance

Before applying, check the DEB’s conditions on who pays the CTP. More information on CTP payments can be found here.

6. GENERATED INCOME MUST BE SPENT ON APPROVED EXPENSES
If your project generates income as part of its operation, for example, you’ve built a community hall which will receive income from venue hire, the money must be put back into the project and can only be spent on approved expenses such as maintenance and operation. Also note, any interest that the fund may gain whilst in the bank is also classed as income and must be spent on the approved project.

The above are the keys points to consider before applying for the LCF. There are many more specific regulations detailed here which EBs must adhere to.

We strongly recommend carefully reading the regulations (and the ENTRUST website as a whole), and the DEB’s criteria, before applying.

Find out which DEB operates in your area:

Biffa Award

Enovert Community Trust

Ibstock Enovert Trust

SUEZ Communities Trust

Veolia Environmental Trust

Viridor Credits Environmental Company