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This publication is available at https://www.gov.uk/government/publications/revenue-and-customs-brief-5-2015-aggregates-levy-tax-credits-in-northern-ireland/revenue-and-customs-brief-5-2015-aggregates-levy-tax-credits-in-northern-ireland
This publication was withdrawn on 12 January 2017.
1. Purpose of this brief
Revenue and Customs Brief 41 (2014) gave details about the introduction of an 80% Aggregates Levy credit for aggregate commercially exploited in Northern Ireland (NI) following its importation from another European Union (EU) member state between 1 April 2004 and 30 November 2010 (‘the relevant period’). This brief gives further information about how the scheme operates.
2. Who needs to read this
Anyone who accounted for Aggregates Levy at the full rate on aggregate that was commercially exploited in NI between 1 April 2004 and 30 November 2010 following importation from another EU member state.
The Aggregates Levy Credit Scheme (ALCS) provided an 80% levy credit to operators in NI who commercially exploited aggregate originating there, provided they entered into an agreement with the Department of Environment (DoE) in NI to improve environmental standards at their site(s). The scheme operated from 1 April 2004 to 30 November 2010. It was suspended from 1 December 2010 while the Commission undertook a State aid investigation into the scheme. This suspension was outlined in Revenue and Customs Brief 42 (2010).
The Commission completed its investigation into the ALCS in November 2014. Although broadly content that the scheme complied with the prevailing rules, it expressed concern that the tax benefit arising from the ALCS did not apply to aggregate commercially exploited in NI that originated in another EU member state. The Commission’s decision required the UK to introduce a new scheme to correct this distortion.
In response to the Commission investigation, Revenue and Customs Brief 41 (2014) was published on 17 November 2014. Draft primary legislation providing for the scheme needed to correct the distortion was published on 10 December 2014 with draft secondary legislation released to the NI industry in February 2015. The primary legislation was included in Finance Act 2015 and the secondary legislation comes into force on 1 April 2015.
This brief updates Revenue and Customs Brief 41 (2014) to give further information about the scheme.
4. How will the new scheme operate?
As the new scheme is comparable with the ALCS, the conditions for entitlement under it are similar to the requirements that ALCS members had to meet between 2004 and 2010. Therefore a claimant under the new scheme must satisfy the DoE that, for aggregate that was commercially exploited in Northern Ireland between 1 April 2004 and 30 November 2010:
- it obtained the aggregate from a quarry or quarries in another EU member state, and
- the quarry or quarries met standards comparable with the requirements of the ALCS
Once the environmental standards of the quarry have been confirmed by the DoE by the issue of a certificate, the claimant can apply to HM Revenue and Customs (HMRC) for a repayment of the levy paid on the aggregate.
5. How can I show that the quarry met the necessary environmental standards?
To get an environmental performance certificate from the DoE you must complete form DOE STC1, which you can download from the DoE website. A separate form must be completed for each quarry you imported aggregate from during the relevant period. This form provides the DoE with details about the quarry and the aggregate you obtained. If, following investigation, the DoE deem the quarry’s environmental performance to have been satisfactory at the time the aggregate was purchased, they will issue a certificate to you. You will need this certificate to support your claim to HMRC for a credit of tax.
6. When can I submit the form(s) to the DoE and where do I send it ?
You must submit the form(s) by 31 March 2016.
Guidance is also available on the DoE website about how to complete the STC1 form.
If you can’t download the form, you can write to DoE at the address below to request copies indicating how many forms you need (namely how many quarries in other member states you obtained aggregate from in the relevant period on which you wish to claim credit). The completed forms should be returned by 31 March 2016 to:
Department of the Environment
Environmental Policy Division
6th Floor, Goodwood House
44-58 May Street
7. How do I apply for a tax credit?
After you receive a certificate from the DoE you should apply to HMRC for a credit of any levy paid at the full rate during the relevant period covering aggregate from the quarry covered by the certificate. Any claim for tax credit made without a valid DoE certificate will be rejected. All credit claims must be made in writing to HMRC no later than 31 March 2019 to:
HM Revenue and Customs
Aggregates Levy Team
Chillingham House, Room BP4002
Benton Park View
Newcastle upon Tyne
You will need to:
- attach a copy of the certificate you have received from the DoE
- identify the Aggregates Levy return on which the levy was declared
- provide a ledger breaking down the entries in box 1 of the Aggregates Levy return and identifying the entry for which credit is sought
- provide commercial evidence of purchase and subsequent importation of the aggregate
If you wish to claim levy credit - and the aggregate was obtained from more than one quarry in another member state - you can either send in your claims separately when you receive each certificate from the DoE or you can send one claim (providing you attach the correct number of DoE certificates). However, if your claim covers aggregate from more than one quarry you must separately identify all the information set out in the bullets above for each quarry.
If all relevant information is provided we will normally process your claim within 30 days. Failure to provide the necessary information will lead to delays while we seek the missing information from you.
Where we decide that your claim is valid, we will pay interest on the sum repayable from the date the aggregate was commercially exploited.
8. I am not currently registered for the Aggregates Levy with HMRC – do I need to register or re-register?
No. Since these claims are historic, there is no need to be registered for the levy to claim a credit under this scheme.
9. I am registered for the levy – can I offset any credit as a result of the new scheme on a return form?
No. This scheme is being implemented in response to a Commission State aid investigation and repayments made under it need to be clearly identifiable from any continuing liabilities.
10. Will aggregate imported into NI from other parts of the UK be eligible for these levy credits?
No. The ALCS aimed to help those operating in the specific circumstances that applied in the NI aggregates market. If an NI operator bought aggregate from a quarry elsewhere in the UK it would not have been the NI operator that would have had to pay the levy at the full rate but the quarry in Great Britain ‘exporting’ the material to NI. It was not the intention of the original scheme to support the quarry in Great Britain and therefore not the intention of the new credit.
Relief, however, will be claimable by registered quarry operators in the rest of the UK on aggregate obtained from another member state which then became taxable as the result of becoming subject to an agreement to supply to a person in NI.
11. Further information
If you have any further questions please contact Catherine Osborne on Telephone: 03000 536971 or email Catherine.Osborne@hmrc.gsi.gov.uk.