Aggregates Levy Exemptions Reintroduced after European Commission Ruling

The exemptions, exclusions and tax reliefs from aggregate levy tax suspended in April 2014 are to be reintroduced after a ruling by the European Commission that they are mostly not illegal state aid. Aggregates levy is a tax on new extracted aggregates used in building, like rock or gravel. The latest Commission decision, case file SA.34775, follows a 2002 judgment by the European Court of Justice that a 2002 Commission decision clearing the levy was wrong. Two issues arise. First, the exemptions suspended in 2014 will be reinstated and the tax repaid. But this could be some time off and there may be problems over interest and compensation for financial loss. Secondly, part of the ruling said the exemptions for shale, and spoil for shale extracts, were (mostly but not all) illegal state aid. So this looks like it now has to be paid back from when it was introduced in 2002 to 2014. This is subject to a €200,000 over three years de minimis limit, with anything over that being covered by time to pay agreements. But that still leaves some shale extractors possibly facing a back bill only because the UK government got its legislation wrong. For details on what HMRC now accept as lawful and what not see their Brief 2 of 2015.

Eamon McNicholas
Tax Barrister, Accountant

About Eamon McNicholas

Tax Barrister, Accountant
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