Policy paper

Aggregates Levy devolution

Published 26 February 2026

This brief tells you about new arrangements for taxing aggregate (rock, sand and gravel) in Scotland from 1 April 2026. 

It also describes what to do if you are based in England, Wales or Northern Ireland and move aggregate into Scotland after 1 April 2026.

What is changing

From 1 April 2026, the Scottish Government will replace Aggregates Levy in Scotland with the Scottish Aggregates Tax. Revenue Scotland will administer the Scottish Aggregates Tax.

You can find guidance on Scottish Aggregates Tax on the Revenue Scotland website.

Commercial exploitation

From 1 April 2026 the rules on commercial exploitation for Aggregates Levy will change.

Aggregate will continue to be exploited for Aggregates Levy when it 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

From 1 April 2026 the aggregate must be in England, Wales or Northern Ireland when this occurs.

In addition, aggregate will be exploited for Aggregates Levy from 1 April 2026 when it is moved to England, Wales or Northern Ireland from a site in Scotland which is:

• its originating site (including the landing site of aggregate dredged from UK waters)
• 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

In this case the operator of the site in Scotland needs to declare and pay Aggregates Levy in the usual way. 

There will also be a charge to Scottish Aggregates Tax on this aggregate, but you can claim tax credit on the Scottish Aggregates Tax return.

You can find guidance on tax credits on the Revenue Scotland website.

UK waters

From 1 April 2026 Aggregates Levy will distinguish between different parts of UK waters.

‘Scottish waters’ means the territorial sea adjacent to Scotland as defined in the Scotland Act 1998.

‘Relevant waters’ means either:

• the territorial sea adjacent to the UK other than Scottish waters
• any area designated by Order in Council under section 1(7) of the Continental Shelf Act 1964

Who will be affected

You’ll be affected by the changes if you’re registered with HMRC to pay Aggregates Levy and you either:

• commercially exploit aggregate in Scotland
• move or supply aggregate to a customer in Scotland from England, Wales or Northern Ireland or from their relevant waters

What to do if you’re affected

You need to register to pay Scottish Aggregates Tax on the Revenue Scotland website.

You must account for Scottish Aggregates Tax to Revenue Scotland on any aggregate you commercially exploit in Scotland from 1 April 2026.

This includes any aggregate you move or supply to Scotland from England, Wales or Northern Ireland or their relevant waters.

If you only operate sites in Scotland

You need to remain registered for Aggregates Levy if you move any aggregate to England, Wales or Northern Ireland from a site in Scotland which is:

• the originating site of the aggregate
• a connected site (registered under the same name)
• a site the aggregate was moved to, to apply an exempt process, but this was not carried out

If you only operate sites in Scotland and do not move any aggregate to England, Wales or Northern Ireland, you will no longer be commercially exploiting aggregate for Aggregates Levy. You need to deregister for Aggregates Levy.

If you need to deregister for Aggregates Levy

To deregister, contact HMRC’s Aggregates Levy team in writing.

The message should be signed by an authorised person in the business, and should include:

• the name of your business
• your Aggregates Levy reference
• the reason you’re deregistering
• the date your deregistration should take effect

If you move aggregates from Scotland to England, Wales or Northern Ireland

You will have to be registered for both taxes if you supply aggregate across the Scottish border.

You will not need to pay both taxes on the same quantity of aggregate.

You must declare and pay Aggregates Levy on aggregate you move from Scotland to England, Wales or Northern Ireland.

You must declare the tonnage of aggregate that you move or supply to Scotland on your Aggregates Levy return, but you can claim cross-border relief on this tonnage.

You’ll need to keep evidence that the aggregate has crossed the Scottish border to claim the relief. You’ll need to declare and pay Scottish Aggregates Tax on this aggregate.

Your Aggregates Levy registration should only include sites in Scotland from which you move aggregate to England, Wales or Northern Ireland, and the originating site of the aggregate if this is different. You should remove any other sites in Scotland from your Aggregates Levy registration. To do this, use the online print and post form AL1A on the page register for Aggregates Levy.

If you will not move aggregates from Scotland to England, Wales or Northern Ireland

If you have sites on either side of the Scottish border, but you will not move aggregates from Scotland to England, Wales or Northern Ireland from any of your sites in Scotland after 1 April 2026, you need to remove these from your Aggregates Levy registration.

To do this, use the online print and post form AL1A on the page register for Aggregates Levy.

Cross-border relief

If you supply aggregate to Scotland from England, Wales or Northern Ireland, you can claim relief from Aggregates Levy on this amount. You’ll need evidence that aggregate you have supplied has gone to Scotland from a registered site.

To claim relief, enter the total tonnage of aggregate you have supplied to customers in Scotland during the accounting period on your Aggregates Levy return. There will be a new box on the return to separately identify this amount.

What evidence you’ll need

Your claim must be supported by documents you normally keep that show the aggregate has moved to Scotland such as:

• customers’ orders
• sales contracts
• correspondence between companies
• copies of invoices showing that the aggregate is moving to Scotland
• evidence the aggregate has arrived in Scotland (delivery note)

For customer collections, you may not have a delivery address or delivery note. But you must get documentary evidence from your customer that they are taking the aggregate to Scotland. This can be a simple tick box declaration which has been signed by the customer. You need to keep a clear audit trail linking the declaration to the details of the supply, including the:

• date
• product
• quantity

Completing your Aggregates Levy return

From 1 April 2026 you need to complete your Aggregates Levy return in the usual way.

There will be one extra box on the return that you only need to complete if you’re claiming relief on aggregate supplied to Scotland (cross-border relief). The return will contain the following boxes:

• 1 - levy due for this period
• 2 - tonnes of taxable aggregate (including relieved aggregate) commercially exploited this period
• 3 - tonnes of relieved aggregate this period
• 3a - of which tonnes moved to Scotland
• 4 - tonnes of exempt aggregate commercially exploited this period

Aggregate supplied from Scotland to England, Wales or Northern Ireland

You should declare aggregate supplied from Scotland to England, Wales or Northern Ireland on your Aggregates Levy return in the same way as other aggregate you declare on your return by putting the tonnage in box 2. The figure you enter in box 1 ‘Levy due for this period’ needs to include the levy on that aggregate.

Aggregate supplied to Scotland from England, Wales or Northern Ireland

Include in box 2 the tonnage of aggregate you supplied to customers in Scotland in the period.

In box 3 ‘Tonnes of relieved aggregate this period’, include this tonnage to claim cross-border relief on it (along with the tonnage for any other reliefs you’re claiming). In the new box 3a, enter only the tonnage that you’re claiming cross-border relief for. If you have not claimed any other reliefs this figure will be the same as the one in box 3.

You cannot claim relief unless you have already accounted for the levy on this aggregate on either this or a previous return and hold any supporting evidence required.

If you’re not claiming cross-border relief you can leave box 3a blank or enter ‘0’.

When to start declaring to Revenue Scotland instead of HMRC

You need to declare any aggregate you commercially exploit for Scottish Aggregates Tax purposes on and after 1 April 2026 on your Scottish Aggregates Tax return.

If you only operate sites in Scotland and do not supply any customers in England, Wales or Northern Ireland from 1 April 2026 you will no longer have to pay Aggregates Levy on aggregate you commercially exploit.

If your final Aggregates Levy return period goes beyond April 2026 you only need to include on your return the aggregate you commercially exploited up to and including 31 March 2026. You then need to submit your return and pay the amount due by the original date, which will not change.

Once you have submitted your final return and paid the levy, deregister from Aggregates Levy. Follow the instructions in the section ‘If you need to deregister from Aggregates Levy’.

Keeping records

The records you keep must show that the amount you declare on your return is accurate.

To support your declarations on cross-border supplies you need to keep records to show that aggregate has crossed the Scottish border. The records you use to support a claim for cross-border relief from Scottish Aggregates Tax can also support your declaration for Aggregates Levy on the same aggregate.

Customer collections across the Scottish border

If customers collect aggregate from your site and take it across the Scottish border in either direction, you’re responsible for accounting for both Aggregates Levy and Scottish Aggregates Tax on that supply in the same way as if you had delivered the aggregate yourself.

Ask your customer to confirm whether the aggregate will be taken across the Scottish border. For more information, read the section ‘What evidence you’ll need’.

Middlemen supplying aggregate across the Scottish border

There is an exemption for middlemen in the aggregates supply chain, such as builders’ merchants.

If you’re a middleman and you purchase aggregates from a quarry to sell from your premises, you will not have any obligations under either tax on aggregates you supply to your customers across the Scottish border.

If you’re a middleman and you arrange with a quarry to deliver aggregate directly to a customer across the Scottish border, both you and the quarry operator will have joint responsibility for Scottish Aggregates Tax and Aggregates Levy. Only one party needs to account for them and pay.

It is likely the quarry operator will be used to dealing with both taxes. You need to ensure that they are willing to do this.

If you have an approved weighing method with HMRC (including water discounts)

Revenue Scotland will honour weighing methods agreed with HMRC initially, but may wish to review or change them in the future. 

You can find guidance on approved weighing methods on the Revenue Scotland website.

Correcting mistakes after 1 April 2026

If you make an error on your Aggregates Levy return

Follow the guidance on correcting errors on your return.

If you incorrectly pay HMRC instead of Revenue Scotland

To request a repayment, contact HMRC’s Aggregates Levy team in writing.

The repayment request needs to be on company headed paper or with a company logo and be from an authorised person in the business. Tell us:

• the business name
• the repayment amount
• how the overpayment happened
• bank details of the business

If you’ve deregistered and want relief on Aggregates Levy you’ve already paid

Contact HMRC’s Aggregates Levy team.

Claims for relief must be made within 4 years of the date the levy was originally paid.

More information

If you have questions about Aggregates Levy devolution, contact Michael Lyttle by email: michael.lyttle@hmrc.gov.uk.