EU decision on aggregates levy ends period of uncertainty for large part of industry
Decision reaffirms that levy is lawful and will enable levy exemptions to be reinstated. Part of exemption for shale aggregate found to be unlawful.
皇冠体育app European Commission have today (Friday 27 March) announced that all but part of one exemption from the aggregates levy are lawful. 皇冠体育appir decision reaffirms the Commission鈥檚 earlier conclusion that the levy as a whole is lawful and is a major achievement for the UK government after almost 13 years of litigation.
皇冠体育app aggregates levy is an environmental tax on commercially exploited aggregates that are used to provide bulk in construction. 皇冠体育app levy exemptions were designed to encourage the use of less environmentally damaging sources of aggregate.
皇冠体育app Commission originally approved the levy exemptions when the tax was introduced in 2002. However, the Commission were forced to re-evaluate this decision after a European General Court judgment of 2012, which followed the British Aggregates Association鈥檚 claims that a number of the exemptions provided unlawful state aid. In April 2014, the government had to suspend these exemptions while this examination by the Commission took place.
Today, the Commission have again agreed with the UK government that the levy exemptions are in line with state aid rules, with the exception of part of the exemption for one material. 皇冠体育appse lawful exemptions will be reinstated as soon as possible in the new Parliament, with effect from the date of the suspension. This will allow the government to repay businesses any tax that they have paid on these materials as a result of the suspension.
皇冠体育app exception to the decision is part of the exemption for shale aggregate, which the Commission have now deemed to be incompatible with state aid rules 鈥� a reversal of their original decision after almost 13 years. 皇冠体育app government is now obliged to narrow the scope of the original shale exemption. Additionally, the Commission have ordered the government to recover the unlawful aid provided by this part of the exemption.
皇冠体育app government is carefully considering what the Commission decision means for businesses that produced this type of shale between 2002 and 2014, and notes that aid below the relevant de minimis threshold does not need to be recovered. It will seek to work with the Commission and businesses to reduce the impact of the Commission鈥檚 recovery order, consistent with the UK鈥檚 legal obligation to recover any unlawful aid.
In addition, HMRC will continue to offer Time to Pay arrangements for businesses that face difficulty paying other taxes as a result of this decision, allowing them to spread payments over a longer period.
Exchequer Secretary to the Treasury, Priti Patel, said:
I am pleased that the Commission decision confirms once again that the levy is lawful. 皇冠体育app decision will enable the government to reinstate the exemptions and repay businesses, as we promised we would do, in the new Parliament. 皇冠体育app decision also removes the uncertainty for the overwhelming majority of businesses that were affected by the Commission investigation.
However, I am extremely disappointed that the Commission have changed their mind on part of the exemption for shale. We will work closely with the industry and do everything in our power to minimise the impact on the businesses affected.
More information for businesses affected can be found in the Brief on Reinstatement of Aggregates Levy Exemptions, Exclusions and Reliefs.