Landfill Tax Reforms Could Drive Major Cost Hikes for Construction, Warns NFB

By Danny BallPublished On: August 5th, 2025Categories: Top Stories

The construction industry is facing major regulatory and cost pressures under proposed changes to the UK’s Landfill Tax system, the National Federation of Builders (NFB) has warned.

The organisation is calling on contractors to prepare for significant increases in waste disposal costs as the Government pushes forward with reforms designed to accelerate the shift towards a circular economy.

Under the new proposals, outlined in a recent HM Treasury consultation, the lower Landfill Tax rate of £4.05 per tonne would be scrapped entirely by 2030.

From that point, all waste would be subject to the standard rate, currently set at £126.15 per tonne.

The Government argues this would act as a financial incentive to reduce waste and increase material reuse, aligning with broader environmental targets.

However, the NFB says the proposed changes could be “industry breaking” if not carefully managed, particularly for SMEs and regional contractors already facing rising materials costs and inflationary pressures.

Key Changes and Timeline

By 2027, the lower-rate tax for mixed waste, where small amounts of standard-rated material are present will also be withdrawn. All mixed waste will be charged at the full standard rate.
The current disposal permit system used by quarries for land recovery will also be scrapped in 2027. Operators will instead need to apply for a recovery permit, which the NFB warns could lead to higher costs and reduced material availability if the system proves difficult to navigate.

These measures are part of a wider policy shift toward behavioural change through taxation, encouraging businesses to minimise landfill use and adopt circular economy principles.

Industry Urged to Act Now

The NFB is advising all builders and contractors to urgently review and update their Site Waste Management Plans (SWMPs) in preparation for the incoming rules.

It has also provided guidance for businesses on how to engage with MPs and policy makers to raise concerns about the timeline and feasibility of the reforms.

In a statement, the NFB said:

“While positive conversations have been had with HM Treasury on whether 2030 is realistic, and what is required to achieve a circular economy and tackle waste crime, NFB is encouraging members to immediately start work on updating their site waste management plans.”

The Federation stresses that, although the reforms are aimed at reducing illegal waste dumping and improving environmental performance, they will have a considerable financial and operational impact on the construction sector.

Potential Supply Chain Disruption

Construction supply chains may also feel knock-on effects if quarry operators face delays or difficulty in securing recovery permits, as this could limit the availability of certain materials and drive up prices.

The NFB is continuing to engage with the Government on transitional support, regulatory clarity, and whether the 2030 target is achievable without damaging impacts to the industry.