Check when Aggregates Levy applies
Find out when Aggregates Levy applies to extracted rock, sand and gravel and when you need to register and pay.
What is aggregate
For the purposes of Aggregates Levy, aggregate is rock, gravel or sand and anything incorporated in them or which naturally occurs mixed with them.
When the levy applies
The levy applies when taxable aggregate is commercially exploited in the UK and UK waters.
You do not have to pay the levy on aggregate if it:
- is not commercially exploited
- is exempt, but you may have to tell us about it
- is the product of an exempt process
- was used before for construction purposes (recycled aggregate)
- has already had the levy applied and was not relieved later
Commercial exploitation
Commercial exploitation happens when aggregate is exploited in the course of business. The exploitation is when aggregate is:
- removed from:
- its originating site
- a connected site (registered under the same name)
- a site it was moved to, to apply an exempt process, but this was not carried out
- used for construction purposes
- mixed with anything other than water, except in special circumstances
- supplied to another person
The first of these to happen will trigger the levy.
You may need to check when aggregate is not commercially exploited.
Removal from site
Originating site
The originating site is where aggregate was won, or most recently won, except if the aggregate is from:
- the seabed within UK waters, it’s where the aggregate is first landed in the UK
- an exempt process (such as offcuts from producing dimension stone), it’s where the process is carried out
Winning aggregate can be from:
- quarrying, mining, digging or dredging
- collecting aggregate that’s been extracted before and left at, or returned to, the originating site or a connected site
Connected site
A connected site is one that’s registered in the same name as the originating site.
Using aggregate for construction purposes
Aggregate is used for construction purposes when it’s:
- used as material or support in the construction or improvement of any structure
- mixed with anything to produce mortar, concrete, tarmacadam, coated roadstone or any similar construction material
Structures include buildings, bridges, roads, paths, embankments and the ground a railway is laid on.
This includes aggregate used for:
- lining ponds and lagoons
- landfill engineering
- railway ballast
- bunds, flood defences, temporary haulage roads and dams
- walling, hedging, gabion and rockery stone
- scouring protection for off-shore wind turbines and foundations for on-shore wind turbines
- landscaping and restoration, unless it’s just filling a void
Construction purposes does not include use in an exempt process.
Mixing aggregate with anything but water
Aggregate is commercially exploited when it’s mixed with anything but water, except in special circumstances.
Special circumstances are when the aggregate is mixed with other taxable aggregate which has not yet had levy applied, and the mixing takes place at either:
- the originating site
- a connected site
- a site aggregate was moved to, to apply an exempt process, but the process was not applied
In this case the levy will not apply when you mix the aggregate. But if you commercially exploit the mixture later, for example by removing it from your site, the levy will apply then.
Supplying to another person
If you supply an agreed amount of aggregate to another person, this is commercially exploited when the following apply the:
- weight or volume of the aggregate is set out in the agreement
- aggregate is set aside in a separate pile
The transfer of rights over the land on which the aggregate is located is not a supply under the levy.
You must account for the levy at the rate set at the time the agreement is made.
If you make an agreement to keep a minimum stockpile of aggregate for a customer, you must pay the levy on any aggregate you add to the stockpile at the rate as set at the time you add it.
If you create a dedicated stockpile after an agreement to supply is made you must pay the levy at the rate as set when you remove it from your site.
Importing aggregate into the UK
Imported aggregate is treated in exactly the same way as aggregate originating in the UK, except that there is no UK originating site. The levy is not due when imported aggregate arrives in the UK, but when it’s commercially exploited in the UK.
You’re responsible for commercially exploiting imported aggregate if, in the course of business, you:
- use it for construction purposes
- own it when it’s mixed with anything other than water
- enter into an agreement to supply it onwards
Commercial exploitation only applies to imported aggregate when it is in the UK. If aggregate is not in the UK when an agreement to supply is made there will be no commercial exploitation at that point.
You must register for the levy when commercial exploitation starts.
Only one party should register, this is normally the importer. You can check who needs to register.
This also applies to incoming aggregate from the Isle of Man or the Channel Islands, which is treated as an import for the purposes of the levy.
Marine-dredged aggregate
Aggregate dredged inside UK waters
The originating site for this aggregate is where it’s first landed in the UK. The same commercial exploitation rules apply for UK marine-dredged aggregate as for land-based aggregate.
UK waters is the exclusive economic zone up to 200 nautical miles from the coast, together with other areas of continental shelf beyond 200 nautical miles in which the UK has rights over the seabed and subsoil.
If marine-dredged aggregate is used for construction purposes on the UK seabed without being landed the levy is still due. The person responsible for using the aggregate in the construction should register for and pay the levy.
Aggregate dredged from outside UK waters
Aggregate dredged from outside UK waters is treated as an import for the purposes of the levy. The levy applies when it’s first commercially exploited in the UK, including in UK waters.
When aggregate is not commercially exploited
Aggregate is not commercially exploited when:
- you move it between connected sites
- you move it to a registered site to have an exempt process applied to it
- you move it to any premises where china clay or ball clay will be extracted from it
- it is marine-dredged and deposited directly onto a beach
- you’re an agricultural or forestry business and return it to the land, unmixed (or mixed with water only), at the site where you won it or at another site within your business*
- before 1 October 2023 only, you returned it to the land at the site where it was won, unmixed (or mixed with water only)*
- from 1 October 2023 you return it to the land at the site where it was won, unmixed (or mixed with water only), for a purpose connected with winning aggregate or other minerals from the site*
*Returning to the land includes using unmixed aggregate to make tracks, paths or haul roads.
Aggregate returned unmixed to the land at the site where it was won, from 1 October 2023
From 1 October 2023 there was a change to the tax treatment of aggregate returned unmixed to the land at the site where it was won. This primarily affects businesses using borrow pits to source aggregate on construction sites.
This aggregate is now commercially exploited unless it is returned to the land for a purpose connected with winning aggregate or other minerals from the site.
Purposes connected with winning aggregate or other minerals include, for example:
- building haul roads to transport the aggregate around the site
- building bunds around the extraction site to screen or reduce noise
- backfilling the extraction site
If you do not use the aggregate on the same site for a purpose connected with winning it, but for another construction purpose, you will commercially exploit it. Aggregates Levy will then be due unless it is exempt aggregate.
For example, if you use unmixed, taxable aggregate from a borrow pit on a construction site to construct part of a road or railway, you must register, send returns and pay Aggregates Levy on the aggregate you commercially exploit.
This change does not affect the position for agricultural and forestry businesses mentioned at the section ‘When aggregate is not commercially exploited’.
How to register
Find out how to register and check who is responsible for the levy in different situations.
Last updated 1 October 2023 + show all updates
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From 1 October 2023, if you return aggregate to the land at the site where it was won, unmixed (or mixed with water only) it may be commercially exploited and the levy will apply.
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As announced in Spring budget 2023 from 1 October 2023, if you return aggregate to the land at the site where it was won, unmixed (or mixed with water only) it may be commercially exploited and the levy will apply.
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First published.