United Kingdom Tax on Aggregates, or UK Aggregate Tax
The Aggregates Levy is a UK tax on the commercial exploitation of rock, sand, and gravel, introduced as an environmental tax to encourage recycling. Most businesses or individuals exploiting aggregate within the UK are required to register with HMRC for the Aggregates Levy, unlike VAT registration which has a threshold.
To be subject to the Aggregates Levy, aggregate must be commercially exploited, a definition that includes removal from its originating site, agreement to supply, use for construction purposes, or mixing with another substance other than water. However, there are several exemptions to this levy.
One such exemption applies to using shale for a purpose other than construction purposes. Another exemption covers material arising from utility works, such as laying gas or water pipes and phone lines, if carried out under specific legislative provisions, and in specific parts of the UK.
Extracting certain industrial minerals is also exempt from the Aggregates Levy. Aggregate products resulting from the separation of coal, lignite, or slate from other aggregate after extraction are also exempt.
Aggregate disposed of as landfill waste is not subject to the Aggregates Levy, but this exception does not apply where the aggregate is used for the purposes of constructing any part of the landfill site. Aggregate which is returned to the ground in the same form as when it was won, and in the same place, is also exempt from the Aggregates Levy.
The production of lime or cement from limestone, or from limestone and anything else, including shale, is exempt from the Aggregates Levy. Creating dimension stone, building stone, or any other type of flat stone by intentionally cutting or otherwise shaping stone to produce one or more flat surfaces is also exempt.
Using aggregate in a prescribed industrial or agricultural process is also exempt from the Aggregates Levy. Drill cuttings from oil exploration in UK waters, and from land drilling in the UK if licensed under specific legislation, are also exempt.
There is no general exemption from the Aggregates Levy when aggregate is extracted in the course of an infrastructure project, but a number of exemptions may apply in limited circumstances. The government is considering a suggestion for a general and flexible exemption for aggregate incidentally extracted as part of a construction project.
The Aggregates Levy is charged at a flat rate of £2 per tonne of rock, sand, or gravel extracted, with proportionate charges for amounts under that weight. The search results do not provide specific information about any government in 2021 planning to review the tax treatment of aggregate extracted during infrastructure projects.
