Find out if and how much Aggregates Levy you should pay as a commercial digger, dredger or importer of aggregate in the UK.
If you’re responsible for digging, dredging or importing aggregate commercially in the UK you must pay the Aggregates Levy to HM Revenue and Customs (HMRC).
The rate of Aggregates Levy you’ll pay is £2 per whole tonne. You’ll pay less for amounts under a tonne. For example you’ll pay £1 for half a tonne or 50p for quarter of a tonne.
You become liable for the levy an aggregate is:
- used for construction purposes
- mixed with anything apart from water (except for in ‘permitted circumstances’)
- subject to an agreement to supply
- removed from:
- its originating site
- a connected site which is registered under the same name as the originating site
- a site where it had been intended to apply an exempt process to it, but this process was not applied
Special rules for specific materials
A number of materials are only subject to Aggregates Levy when they are intended to be used for construction purposes. These are:
- any material which is more than half clay, coal, lignite, slate or shale
- industrial minerals
- any material which is more than half, but not exclusively, the waste or by-product of:
- an industrial combustion process
- the smelting or refining of metal
You don’t pay Aggregates Levy on any material that’s more than half:
- soil, vegetable or other organic matter
- drill cuttings from oil exploration in UK waters or through land drilling in the UK if you’re licensed under the Petroleum Act 1998 or the Petroleum (Production) Act (Northern Ireland) 1964
- material arising from utility works carried out under the New Roads and Street Works Act 1991, the Roads (Northern Ireland) Order 1993 or the Street Works (Northern Ireland) Order 1995
You also don’t pay Aggregates Duty on any material that’s 100%:
- spoil, waste or other by-products from industrial combustion or the smelting or refining of metal, even if it’s later mixed with other materials
- extracted within the terms of planning consent to lay a building’s foundations, pipes or cables
- from navigation dredging carried out to create, restore, improve or maintain waterways
- from the ground from excavations to improve, maintain or construct a highway or a proposed highway (can include land take approved by the planning authority, but not borrow pits nearby)
- from the ground from excavations to improve, maintain or construct a railway, monorail or tramway (can include land take approved by the planning authority, but not borrow pits nearby)
If you mix taxable and exempt materials, you’ll still need to pay the levy on the taxable aggregate.
You can get a credit or repayment from HMRC if the aggregate is:
- exported from the UK in the form of aggregate
- used in an exempt process after the Aggregates Levy has been accounted for (though any by-products from the exempt process are taxable as aggregates if you commercially exploit them)
- used in a prescribed industrial or agricultural process
- disposed of as waste in a way that it’s not being used for construction purposes (such as being put back where it came from unprocessed, removed to landfill or used for beach replenishment)
Claim for a customer’s insolvency
You can also make a claim for bad debt relief if a customer becomes formally insolvent owing you money for taxable aggregate.
You must claim any relief within 4 years from the date of the payment of the levy your claim relates to. You can also claim relief before you pay the levy.
HMRC may issue a penalty to you if you claim relief incorrectly.
You can get relief on Aggregates Levy for aggregate you supply to a destination outside the UK. You must prove it’s left the UK with valid documentary evidence.
Industrial and agricultural processes relief
HMRC provides relief for processes that result in material that’s not used as an aggregate through industrial and agricultural processes relief. For example, when limestone is ground down to a fine powder to act as ‘glue’.
There are 45 processes that qualify for Aggregates Levy relief under section 30(1) (c) of the Finance Act 2001.