Q. Will our project need a Contributing Third Party payment?
+
This is the decision of the Landfill Operator (LO) who has agreed to fund your project. Some LOs do not require a Contributing Third Party (CTP) payment. The LO is able to claim tax credit for 90 per cent of the funding it contributes to the Landfill Communities Fund so a CTP payment of 10 per cent makes the LO’s contribution ‘cost neutral’. LOs may absorb some or all of the 10 per cent themselves.
Q. How much should a Contributing Third Party (CTP) provide?
+
Landfill Operators (LOs) can claim a tax credit for 90 per cent of each contribution they make to an Environmental Body (EB) leaving the LO with a 10 per cent shortfall which can be recovered by requesting a Contributing Third Party (CTP) donation. HMRC expects LOs to absorb some or all of this shortfall themselves so the amount required from a Contributing Third Party (CTP) should be 10 per cent or less than any contribution made.
Q. Can an Environmental Body fundraise to find the Contributing Third Party payment?
+
An Environmental Body (EB) is allowed to fundraise the Contributing Third Party (CTP) payment provided that it is made clear to each person at the time they make their contribution that the money will be paid to a Landfill Operator (LO) to secure Landfill Communities Fund (LCF) funding for the EB. In such cases the people making the contribution will be the CTPs.
The EB is permitted to act as an intermediary for the CTP payment where it is not practical for each CTP to pay the LO direct. The EB should contact us to obtain approval before acting as an intermediary, and in every case must keep the CTP payments separate from their own funds as the CTP contributions do not belong to the EB.
Where the EB has used fundraising, the EB should record the names and addresses of the individual CTPs where possible (and particularly where there are large individual payments). Where this is not possible then the name and date of the fundraising event may be given as the CTP. The EB should keep this record in its own project files which will be checked during a Compliance Inspection. Please see the Guidance Manual or contact us for more information on the requirements where the CTP payment comes from fundraising. Please note that CTP payments are not eligible for Gift Aid as they are not charitable donations.
Q. Can a sub-committee of the Environmental Body be the Contributing Third Party?
+
No. The Contributing Third Party (CTP) must be an entirely separate legal entity from the Environmental Body (EB). A sub-committee of the EB is not a separate legal entity and so cannot be the CTP.
Q. Can a trustee of the Environmental Body be the Contributing Third Party?
+
An individual or corporate trustee of the Environmental Body (EB) can be the Contributing Third Party (CTP) and use their own money to make the CTP payment, provided that there is no unique benefit to that CTP from any expenditure of the EB. Please see our Guidance Manual for more information on Unique Benefit and the rule that a CTP is regarded always as being a contributor.
Q. Can the local council be the Contributing Third Party?
+
A local council can be the Contributing Third Party provided it does not receive a unique benefit from any of the Environmental Body’s expenditure. Please see the Guidance Manual for more information on Unique Benefit.
Q. Are there any considerations for a Contributing Third Party?
+
A CTP who makes a payment to a Landfill Operator (LO) to enable funds to be released to an Environmental Body (EB) will be considered always to be a contributor for that EB. This means that the CTP cannot receive a unique benefit from any transactions which that EB undertakes. This can affect future transactions, particularly if the CTP is also a potential supplier of goods and services to that EB as the CTP will not be able to make a profit from any future supply. Please see our Guidance Manual for more information on Contributing Third Parties and Unique Benefit. We have also created a CTP decision tree and a set of CTP examples which helps you to determine whether a potential CTP meets ENTRUST's requirements. These are available on the CTP page of our website.
Q. What is Unique Benefit?
+
Landfill Operators (LOs) and Contributing Third Parties (CTPs) are prohibited from receiving any special benefits from their contributions to a project that others do not receive. A "Unique Benefit" refers to any advantage or profit that LOs or CTPs gain, which exceeds what would be available to any other member of the public who might visit, use, or enjoy the project, or engage with the Environmental Body (EB).
Examples of unique benefits include: (1) An LO or CTP acting as a supplier for the project and making a profit from the EB’s spending. (2) An LO or CTP receiving special access to a project site or other facility managed by the EB.
Once an LO or CTP contributes to a project, they are permanently classified as a contributor to that EB's project and thus cannot receive any special benefits from any of the EB’s future expenditures.
The definition of Unique Benefit is broad, and further details can be found in our Guidance Manual on this topic.