Aggregates Levy could be scrapped, as EU orders review

The Aggregates Levy could be scrapped, following a decision by the European Court of Justice (ECJ) that the justification for the charge should be reviewed.

The ECJ yesterday overturned a 2006 decision of the European Court of First Instance (CFI) that the 2002 Aggregates Levy was lawful and did not constitute State Aid.

Commenting on the latest, British Aggregates Association director Robert Durward said:

"It is noteworthy that the European Court of Justice has agreed with the BAA on every fundamental point. This makes it very unlikely that the Levy will survive in its present form."

"It would appear that the CFI will now have little option but to declare that the Levy, as it stands, constitutes illegal State Aid and must be modified or scrapped. However, for the Levy to comply with Article 87(1) EC it would have to be extended - retrospectively - to all currently exempt minerals such as coal, slate and china clay,” he added.

The BAA has been fighting against the Aggregates Levy since its introduction.

The Levy was originally put forward as an environmental measure rather than to raise government revenue. It was intended to finance the Sustainability Fund, which funds projects that address the environmental impacts of quarrying.

But some have raised concerns that HM Revenue & Customs has chosen to apply the levy more widely. It is now investigating a number of construction businesses with a view to collecting substantial amounts of aggregates levy.