Augean : HMRC assessment and proposed board appointment

25 August 2017

This announcement contains 'inside information'.

Augean plc ('Augean' and with its subsidiaries the 'Group')

Notice of Assessment for Landfill Tax from Her Majesty's Revenue and Customs (HMRC)

Proposed Director Appointment

Augean, one of the UK's leading specialist waste management businesses, has today been notified of an assessment by HMRC for landfill tax of £1.9m with interest of £0.2m for the three months ended 31 August 2013.

HMRC has been discussing with the Group whether it has paid sufficient landfill tax in relation to its treatment and disposal of hazardous waste. Those discussions are ongoing. Based on the legal and other advice received by the Group over several years, Augean is very confident that the group has met its obligations in respect of landfill tax, consistent with the law and official guidance at the time. However, HMRC has today issued an assessment on a subsidiary of the Group for landfill tax of £1.9m with interest of £0.2m for the three months ended 31st August 2013. We understand this has been issued in order to protect HMRC against that period falling out of time (a four year look back applies for landfill tax) whilst they undertake further enquiries and discussion with Augean. Augean believes this assessment to be without merit and we will appeal.

As stated in the Group Business Risks within the Preliminary Announcement issued on 21st March 2017, landfill tax legislation is not totally prescriptive on the tax treatment of the many types of waste received by the Group which can lead to differences in opinion on the applicable rate of landfill tax. Hence the reason the Group has taken extensive legal and other advice over several years.

Should HMRC make further such assessments, for this and one other subsidiary, the total amount that could potentially be claimed could be very large. Augean intends to work with stakeholders in the sector about the broader adverse implications for the continued and necessary proper treatment of hazardous waste.

Supported by advice from leading counsel and its solicitors, the Group will robustly challenge this landfill tax assessment and any other subsequent assessment it may receive from HMRC, through the tax tribunal system if appropriate. The Group currently intends to account for the legal costs of the dispute with HMRC as an exceptional item but not to make a provision for this assessment based on the strength of legal opinion received.

Andrew Bryce, who has previously been on the Board for over 10 years, has offered to re-join the Board. Given the HMRC assessment and Andrew's extensive experience of Augean and environmental law, the Board proposes to appoint Andrew to the Board as Non-Executive Director as soon as practicable subject to the completion of the necessary regulatory due diligence by N+1 Singer.

Further announcements will be made at the appropriate time.

Ends

For further information, please call:

Augean plc

Dr Stewart Davies, Chief Executive 01937 844 980

Mark Fryer, Group Finance Director

N+1 Singer

Shaun Dobson 020 7496 3000

Alex Price

FTI Consulting

Oliver Winters 020 3727 1000

Fiona Walker