Increases to the Aggregates Levy rate from 1 April 2024
Published 22 November 2023
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Who is likely to be affected
Businesses in the UK who quarry, dredge or import rock, sand or gravel (aggregates).
General description of the measure
This amends the rate of the Aggregates Levy to £2.03 per tonne from 1 April 2024 in line with the Retail Price Index (RPI) as forecast at Spring Budget 2023.
Policy objective
Aggregates Levy is charged on primary virgin aggregate (rock, sand and gravel) that is commercially exploited within the UK. The levy encourages the efficient use of aggregate including the use of recycled and secondary aggregate as an alternative. Aggregate is mainly used for its bulk properties in construction.
Increasing the rate of Aggregates Levy in line with RPI means that Aggregates Levy can continue to help the government meet its environmental objectives by strengthening the price incentive to use recycled aggregate instead of virgin aggregate.
Background to the measure
The rate of Aggregates Levy has been frozen since 2009. The government announced at Spring Budget 2023 that the rate would increase in line with RPI from 1 April 2024.
Detailed proposal
Operative date
The increase in the rate of Aggregates Levy will apply to aggregate commercially exploited on or after 1 April 2024. The rate change will apply across the whole of the UK.
Current law
Section 16 of the Finance Act 2001 specifies the rates of Aggregates Levy.
Proposed revisions
Legislation will be introduced in Autumn Finance Bill 2023 to amend section 16(4) of Finance Act 2001 to provide for the new rate of Aggregates Levy. The current rate of £2 per tonne will increase to £2.03 from 1 April 2024.
Summary of impacts
Exchequer impact (£ million)
| 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 |
|---|---|---|---|---|---|
| — | Nil | Nil | Nil | Nil | Nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impact.
Impact on individuals, households and families
This measure is not expected to have a direct impact on individuals or households and is not expected to impact family formation, stability or breakdown.
Equalities impacts
HMRC do not hold information about the protected characteristics of individuals involved in this sector, however, it is not anticipated that there will be adverse impacts for those in groups sharing protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on approximately 600 businesses who will pay a higher rate of Aggregates Levy on aggregate that they commercially exploit.
Negligible one-off costs will include familiarisation with the change and could involve updating internal systems to reflect the new rate. There are expected to be no continuing costs.
Customer experience is expected to remain broadly the same as this measure does not alter how businesses interact with HMRC. This measure is not expected to impact civil society organisations.
Operational impact (£ million) (HMRC or other)
HMRC will not incur any operational costs implementing this change.
Other impacts
Uprating Aggregates Levy by RPI maintains the real terms value of the incentive to use recycled, rather than virgin, aggregate.
Other impacts, including carbon impacts, have been considered and no significant impacts have been identified.
Monitoring and evaluation
This measure will be monitored through receipts and tonnage information collected from tax returns.
Further advice
If you have any questions about this change, please contact Andrew Clancy on Telephone: 03000 543017 or email: andrew.clancy@hmrc.gov.uk.