A recent Tribunal (Tax) case, Nuttall and another v HMRC [2026] UKFTT 674 (TC), raises some very practical issues about what can happen to waste, and to those storing it, when the party responsible becomes insolvent.

As well as providing a helpful overview of landfill tax liability, the decision serves as a cautionary tale for those operating in the waste sector, particularly businesses offering storage or handling services for others. It also highlights the uncertainty and risk of relying on export routes, where material can remain in storage for extended periods before onward movement.

 

Background

The appeal was brought by North Killingholme Storage Limited (“NKSL”) and its sole director, Mr Jonathan Nuttall. They challenged HMRC’s assessment for landfill tax under section 50A Finance Act 1996 (and associated interest) totalling about £1.3m.

Key facts were as follows:

• The assessment related to around 7,686 tonnes of refuse derived fuel (“RDF”) that was bagged and stored on NKSL’s land under an agreement dated 28 June 2011 between NKSL and SRF Processors (UK) Limited (“SRF”).
• The agreement allowed temporary storage pending export for use in combined heat and power plants in continental Europe (which typically needed more RDF in winter than summer).
• SRF was associated with Asset and Land Group Limited (“ALG”).
• Storage of the RDF at the site was authorised under an Environment Agency waste management licence.
• The licence was granted to NKSL on 22 January 2004 and later transferred to North Killingholme Recycling Limited (“NKRL”) on 13 July 2012. Mr Nuttall was also a director of NKRL. HMRC did not suggest the transfer had any improper purpose.
• In January 2012 the Environment Agency began raising concerns about the growing stockpile. Mr Nuttall also raised concerns and asked the Agency to take action against ALG to compel removal of the RDF.
• SRF and ALG were dissolved in 2015. On SRF’s dissolution, legal ownership of any remaining property (including the RDF) passed to the Crown as bona vacantia (i.e., “ownerless property”).
• NKRL was dissolved on 28 September 2017. From that date the waste management licence was automatically revoked.

 

HMRC: Intention and disposal

HMRC’s position was that once the licence was revoked the RDF was no longer being lawfully stored and had, in effect, been “disposed of” on the land.

HMRC also argued that there can be a taxable “disposal” even where nothing is physically tipped or moved. In their view, simply keeping waste on land without the required permit can itself amount to a disposal. They relied on changes made in 2018, which removed the earlier requirement to show an intention to dispose.

NKSL and Mr Nuttall said that nothing “happened” on 28 September 2017: the RDF remained exactly where it had been lawfully placed years earlier.

The Tribunal heard evidence that Mr Nuttall repeatedly tried to have the RDF removed once concerns emerged about the growing stockpile. NKSL also continued to manage the site after the permit lapsed, including re-baling the RDF, carrying out pest control and maintaining containment measures to minimise environmental risks.

By April 2025 the entire stockpile had been cleared at the expense of the appellants.

 

Intention as part of a multi-factorial assessment

Although intention is no longer a formal legal requirement in the way it once was, the Tribunal treated it as part of a wider, fact-sensitive (“multi-factorial”) assessment of whether there had been a disposal for landfill tax purposes.

It then weighed the surrounding facts, including:

1. legal ownership of the RDF passed to the Crown as bona vacantia when SRF was dissolved;
2. up to that point the RDF had been kept on the site lawfully;
3. NKRL had regulatory duties to minimise the risk of pollution;
4. once NKRL was dissolved the licence was revoked, meaning the RDF was then being kept on the site unlawfully;
5. NKRL was not dissolved to evade obligations; it followed non-payment by SRF;
6. the RDF was stored on land leased to NKSL (not NKRL);
7. no-one intended the RDF to remain permanently: it was brought for temporary storage and SRF was responsible for exporting/removing it;
8. the taxpayers had made serious efforts to secure removal;
9. there was a strong economic incentive to clear the RDF because storage fees were not being paid and the land could not be used for anything else;
10. the RDF was kept securely and actively managed so it did not become an environmental hazard (including re-baling and rodent control);
11. removal was eventually arranged; and
12. HMRC did not suggest the taxpayers were “rogue operators”.

Considering those factors in the round, the appeal was allowed.

 

Practical takeaways: why this matters beyond tax

The wider point is this: if you hold the waste management licence and allow third-party waste to be stored on your site, you may end up carrying the practical and financial burden if that third party disappears.

Even where you have done nothing “wrong”, you can be left managing the material, dealing with the regulator and, potentially, facing a tax bill, because the waste is still sitting on your land.

There are also potential environmental liabilities. Regulators can require a landowner or occupier to take steps to prevent pollution, and clean-up costs can escalate quickly, especially if the waste becomes “ownerless” on insolvency. Depending on the facts, you may face enforcement action, civil claims, and significant costs to maintain containment, repackage material, and arrange removal or disposal.

 

What could NKSL have done differently?

Hindsight is a luxury, but this case usefully highlights some risk controls that site operators and licence-holders often consider when storing waste for others:

• Financial security up front: require a bond, escrow, deposit or other financial assurance sized to cover removal and lawful disposal if the customer defaults or becomes insolvent.
• Clear contractual allocation of risk: spell out who owns the waste at each stage, who carries compliance obligations, and who pays for re-baling, containment, insurance and emergency response. Although in this case, this does seem to have been done.
• Step-in and self-help rights: include an express right to arrange removal/disposal yourself and recover costs (including from a guarantor) if export does not happen by agreed deadlines.
• Time limits and trigger points: build in maximum storage periods, rolling volume caps and automatic “stop accepting waste” triggers if stockpiles exceed agreed limits or export routes stall.
• Counterparty due diligence and guarantees: assess the customer’s financial standing and consider a parent company guarantee where the operating company is thinly capitalised.
• Export documentation and contingency planning: require evidence of contracts with end-users, shipping slots and regulatory paperwork; plan for a fall-back disposal route if export becomes unavailable.

In short, the case is a warning to licence-holders: if you let third-party waste sit on your site without robust exit mechanics and financial security, you may be the one left “holding the baby” when things go wrong.

 

For legal guidance and advice on how this judgement may apply to your business, please contact Maria O’Loan or another member of our Planning and Environment team.

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.