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- Holyrood’s Finance Committee Endorses Aggregates Tax Bill
Holyrood’s Finance Committee Endorses Aggregates Tax Bill
29 April 2024
The Scottish Parliament’s Finance and Public Administration Committee (FPAC) has agreed the general principles of a Bill that will create a new Scottish Aggregates Tax (SAT) - a tax on the commercial exploitation of materials such as rock and gravel used in the construction industry.
The Bill will essentially deliver a devolved version of the UK aggregates levy, currently set at £2.03 per tonne.
The Scottish Government has expressed an ambition to boost the use of recycled construction materials but has not yet indicated if it will increase the tax to encourage such measures.
Finance and Public Administration Committee Convener Kenneth Gibson said:
“The Committee is supportive of the Bill's aims. However, we note the current lack of available data collected by HMRC under the current UK scheme.
“Significantly more research and data are needed to inform the rate-setting process in a way that will contribute to the environmental aims stated in the policy memorandum.
“We also have concerns at the number of quarries from which aggregates are not being taxed; an issue that must be addressed.
“The policy memorandum states that the Bill will support the Scottish Government’s ambitions for a circular economy through:
“Encouraging the minimum necessary exploitation of primary aggregates … maximising the use of secondary and recycled aggregates, and … incentivising innovation and development or alternative materials”.
“To contribute to fulfilling these environmental ambitions Scottish Ministers must consider whether or not to increase the levy once it’s devolved.
“We would like to see more action being taken to incentivise investment in recycling and diverting material from landfill and look forward to receiving the results of a Scottish Government survey, currently being undertaken which will help inform decisions around rate setting.”
Background
- The Bill was introduced on 14 November 2023 and makes provision for a Scottish Aggregates Tax (“SAT”), a tax on the commercial exploitation of primary aggregates, to be administered by Revenue Scotland.
- The Bill also makes a number of amendments to the Revenue Scotland and Tax Powers Act 2014 (RSTPA) in relation to the administration of devolved taxes.
- It is the intention of the Scottish Government that, if the Bill is enacted and the necessary secondary legislation approved by Parliament, SAT will be introduced from 1 April 2026.
- As explained in the policy memorandum, the Bill was introduced primarily as a consequence of measures enacted in the Scotland Act 2016, which enabled the Scottish Parliament to legislate for a tax to replace the UK Aggregates Levy (UKAL) in Scotland.
- The Bill proposes that the SAT will be collected and managed by Revenue Scotland, as the tax authority responsible for the administration of devolved taxes in Scotland. According to the explanatory notes, as with the UKAL, the SAT is an environmental tax that aims to reduce the extraction of primary (i.e. fresh or new) aggregate.
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