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HMRC internal manual

Aggregates Levy Guidance

From
HM Revenue & Customs
Updated
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Introduction: Outline and structure of regime

This section gives information on the outline and structure of the aggregates industry.

Outline of the regime

The objectives of the levy are: to address, by taxation, the environmental costs associated with quarrying operations (noise, dust, visual intrusion, loss of amenity and damage to biodiversity) in line with the Government’s statement of intent on environmental taxation; to cut demand for aggregates; and encourage the use of alternative materials where possible.

The scope of the levy is the commercial exploitation of sand, gravel and rock in the UK. This includes aggregates dredged from the seabed within UK territorial waters. The structure of the levy is a one stage, non-deductible specific tax currently charged at £2.00 per tonne. For businesses in Northern Ireland who comply with the Aggregates Levy Credit Scheme (ALCS), which ran from 1 April 2004 to 30 November 2010 when the scheme was suspended following a ruling by the European General Court, there has been 80% relief from the levy - the rate was effectively 40p per tonne.

Operators who commercially exploit aggregates need to register under the provisions of the Finance Act 2001. There are no minimum threshold limits. The registered person sends aggregates levy returns monthly or quarterly.

There are non-taxable aggregates, materials exempt from the levy, exempt processes and circumstances when the aggregates may be relieved from the levy.

Contribution to the revenue

The levy is revenue neutral in that the money raised is returned to business through a 0.1% point cut in employer National Insurance Contributions.

The amount of revenue collected from aggregates levy accounts for about 0.3% of the total revenue collected by the department and was £290 million in the financial year 2011/12.

Structure of the aggregates industry

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