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EU aggregates levy decision another milestone, says BAA

Robert Durward

British Aggregates Association says EU Phase II decision marks another significant victory

THE British Aggregates Association (BAA) says last week’s EU Phase II decision, which found illegal state aid in the aggregates levy (AGL), marks yet another significant victory for the Association.

Although it will be some time yet before the full text of the decision is published, the BAA says it is clear that the foundations of the levy itself have now been cracked.  

On 27 March, the EU Commission agreed with the UK Government that all levy exemptions are in line with state aid rules, with the exception of part of the exemption for shale aggregates, and can now be reinstated.

However, based on what has been announced so far, the Association says it would appear that the EU Commission has either got it wrong on certain of the other exemptions or it has once again stretched the law.

It says this is what happened in Northern Ireland when an earlier Phase II investigation decided that the NI Aggregates Levy Credit Scheme (ALCS) was not illegal.

The BAA says that despite a great deal of pressure from NI operators and politicians, the ALCS scheme cannot be reinstated on the same basis – a contradiction that would appear to cast serious doubt on the impartiality of the Commission.  

Under state aid law, a large number of companies across the country who have been selling shale aggregates could now be faced with AGL bills going back to 2002 plus compound interest – a situation that the BAA says is the direct result of the Government's failure to accept that the aggregates levy is flawed.

BAA director Robert Durward (pictured) commented: ‘We have always said that the eventual demise of the AGL could be messy and a number of our own members are also now at risk of having to repay shale exemptions. However, we have obtained legal advice on the matter and the Association will support companies faced with draconian bills from HMRC.’  

The BAA says despite claims by HMRC that the AGL is now in the clear, this is far from being the case. It says the environmental façade of the levy has been discredited and the Association has a hearing in the Court of Appeal in November 2015 to challenge the 2002 judgment by Justice Moses that the levy did not involve state aid.  

Mr Durward added: ‘Although there is a way to go yet, the BAA fully expects that this hearing will provide, at the very least, yet another step in the right direction.’

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Submitted by Ryan (not verified) on

Repaying shale exemptions would put companies out of business. The fact of the matter is that shale would not have been sold at the same quantity if the £2 per tone aggregate had been applied between 2002 and 2014. Since the aggregate was applied we have seen a sharp decline in sales of shale. How can quarries compete with farmers selling shale at rock bottom prices without paying anywhere near the same rates! Many don't pay agg tax as they claim it to be waste as part of site clearing (planning given for agricultural sheds, etc.) There are also many delivering illegally in overloaded trailers and tractors running on red diesel! Sorry for going off topic, I am of an opinion that abolishing aggregate tax would lead to a fairer playing field!

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