[cynicalkane]

If UK taxes work like US taxes, then the community in question doesn't capture this externality (it goes to the state/Feds), so that's small comfort to them.

[rahimnathwani]

Taxing an externality can change behaviour, and the impact is not diminished even if you just burn the cash, rather than redistributing it.

(Unless you're taxing carbon emissions, in which case burning the cash would obviously contribute to the problem.)