Historic now, as the tax has been paid but hope it is of interest. Thank you Jack for your research note.

TAX ISSUES YET A SAFE HAVEN FOR HAZARDOUS WASTE ......published to StockwatchUK members on the 6/11.

Augean has a £170m market cap, is AIM listed and is the UK’s leading hazardous waste management business with a customer base across a range of UK sectors. The receiving waste sites are spread across the UK and the PLC the UK’s ‘safe haven for hazardous waste’. I met with Jim Meredith, Executive Chairman and Mark Fryer, the GFD. There is no CEO and one is not expected to join. A October trading update stated the PLC would exceed estimates and the share price has more than double since September. N+1 are the brokers and the PLC currently doing an out of season, non- profit discussing investor road show. One topic dominates being tax. Tax.

The black cloud for investors is the PLC has a long running dispute with the HMRC over a £55m landfill tax bill, remembering that this tax was enacted to promote responsible disposal of waste materials. The UK definition of waste is a verbal one, as the HMRC wanted and the EU have a waste code. The waste producing industries / sectors are trying to mitigate / avoid/ reduce the tax. Possibly the law is a bad one and determination needed to solve the issue. The tax has charge levels and loop holes (is soil going to a golf courses hazardous) are being sort by waste producers with waste being ‘diluted’ to avoid higher tax thresholds The final tax demand could be £55m (with penalties) and the PLC fully prepared to contesting the tax demand. The Augen North division assessment is for £10.3m of tax and the South £34.7m, both for the period from 8/13 to 5/18. The original bill was £120m and sent 2.5 years ago. The PLC is a test case for the HMRC, as no downside for them and the matter more than likely ends up in the High Court in 5 years’ time. Tax demands to other operators will follow if the HMRC win. Simmons & Simmons say the correct amount of landfill tax has been paid and a tax tribunal is possibly going to happen in Q2 2020, starting the determination process. KPMG were employed to do a forensic analysis of the…

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