AN OUT-OF-COURT deal has been reached to resolve a tax dispute over the use of a landfill site in East Ayrshire.

Revenue Scotland had told Barr Environmental Ltd (BEL) to pay unpaid tax and penalties in July 2018 over unpaid Scottish Landfill Tax (SLT).

Barr had been found to be using materials at its Garlaff landfill site, near Cumnock, that should have been classed as waste.

A First Tier Tax Tribunal initially refused the company’s appeal against the ruling, saying the company was liable for a £99.6 million bill in unpaid taxes and fines.

However, the company then appealed to the Upper Tribunal for Scotland – which overturned the First Tier’s decision.

Now it can be revealed that Barr and Revenue Scotland have reached an out-of-court settlement to resolve the dispute. But both said it was a private matter.

A spokesman for the Scottish Courts and Tribunal Service confirmed: “We have been advised that parties Barr Environmental Ltd and Revenue Scotland have agreed to settle matters in dispute in the lead appeal.“

The parties have also settled the follower appeals and they have been withdrawn.”

Despite the public decision in the 2021 case, Revenue Scotland said it could not comment as it had a legal obligation to “protect taxpayer information”.

The original tribunal found that over more than two and a half years, Barr was able to offer a cheaper rate for landfill services than their competitors, helping them win council contracts between April 1, 2015 and December 31, 2017.

But In a judgement published last May, Lord Ericht said the First Tier Tribunal had “erred” by failing to take into account that saving landfill tax by using recycled materials “fulfils the objective of the tax”.

“Instead, the Tribunal proceeded on the basis that there was something inherently wrong with reducing tax by using recycled materials,” he said.

A Barr Environmental spokesperson said: “Barr Environmental and Revenue Scotland have reached a confidential out-of-court agreement in relation to a case about Scottish Landfill Tax.

“We welcome the agreement and remain focused on providing the best waste management solutions to our clients moving forward.”

The case hinged on how Barr used material that should have been designated for the landfill for “engineering works” for construction and development of the landfill.

Barr said it was following the advice of accountants KPMG.

Thousands of pages were submitted in evidence on the case, related to hundreds of thousands of tonnes of waste.

A Barr Environmental spokesperson said: “Barr Environmental and Revenue Scotland have reached a confidential out-of-court agreement in relation to a case about Scottish Landfill Tax.

“We welcome the agreement and remain focused on providing the best waste management solutions to our clients moving forward.”

An East Ayrshire Council spokesperson said: “EAC is pleased to hear that Barr Environmental Ltd have resolved all aspects of this matter to their satisfaction and can now focus on moving their business forward.

“It is unlikely to have any impact however on the local position as EAC actually acquired the Garlaff  waste recycling facility from BEL on December 23, 2022.

“We have since worked with our current contractor, Enva, to restore the previous working arrangements as originally operated by BEL in order to avoid the significant additional costs which were otherwise being incurred due to the non-availability of the Garlaff facility by removing the need for any waste to be transferred to Western Road in Kilmarnock. 

“The council now owns and operates the Garlaff  waste recycling facility whilst BEL remain the occupiers and operators, with responsibility for the ongoing maintenance, management and remediation  of the adjacent landfill site as it is run down following cessation of landfill activities.

“For completeness, EAC has today also completed the acquisition of the Southhook facility in Kilmarnock from BEL, which will also assist in continuing to provide the best possible waste service whilst reducing or minimising costs wherever possible.

“EAC enjoyed a successful working relationship with BEL over many years and wish them all the best for the future as we each embark on the next stage of our respective journeys.”