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United Kingdom: Quarry Industry Slams HMRC On Aggregates Levy

26 August 2013   (0 Comments)
Posted by: Author: Amanda Banks
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Author: Amanda Banks

The British Aggregates Association has branded HM Revenue and Customs "misleading" and "irresponsible", following a recent announcement to the quarry industry about a European Commission investigation into the aggregates levy.

The EC is currently looking into whether certain exemptions and reliefs in the levy, which taxes the commercial exploitation of rock, sand and gravel, amount to unlawful and anti-competitive state aid. The BAA, which represents seventy companies operating in three hundred sites, takes issue with several statements that appeared in an HMRC briefing published in the wake of a private letter from the EC to the UK Government about the investigation.

In particular, the BAA notes that HMRC says that "the Commission has not asked the Government to suspend the exemptions," and there is therefore no reason to do so. The BAA asserts that this is contrary to European Union law, and that it gives a false impression of business as usual, "which it most definitely is not." The BAA has written to HM Treasury and to the Department for Business and Innovation, requesting that the Levy be suspended with immediate effect.

The industry body also questions an HMRC claim that the EC does not consider the levy itself to be in question, and it argues that this "is at complete odds with State aid law." The BAA wants the Government to disclose the actual words of the letter.

The BAA further asks the Government to explain the basis for its expressed "confidence" that the EC investigation will accept the Government’s position. The BAA complains that "HMRC have now claimed on several occasions to have additional evidence which supported its position but failed to produce it."

The body says it is "deeply concerned" by HMRC advice, which is that the EC could require companies to pay back reliefs and exemptions but that no further action is required at this time.  The BAA is in contrast urging all companies that have benefited from levy exemptions to seek legal advice, warning that companies may be compelled to make a repayment "irrespective of whether this may cause them to go into liquidation."

Robert Durward, director of the British Aggregates Association, was quoted as saying that across the country there are quarries that look the same, that compete in the same market, and that have the same environmental impact, but that in some cases are subject to the levy while others are not. He expressed hope that the levy will be declared illegal at a case due to be heard at the London Court of Appeals in October, arguing that "this would mean that the ultimate remedy would be possible repayment of Levy paid rather than the inevitable liquidation of companies who had exemptions or derogations."


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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