Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Euro court close to aggies tax decision

MATERIALS - Government braced for up to £1.3 billion in rebate claims if tax deemed illegal

QUARRIERS are waiting with bated breath while a European court decides whether the Government should be forced to pay back the £1.3 billion it has raked in through a tax on aggregates.

Judges at the European Court of First Instance in Luxembourg will rule on the legality of the tax on stone on September 13 following a legal challenge by the British Aggregates Association.

In a hearing at the court in December last year lawyers representing the association argued that a decision by the European Union to allow the Government to limit the amount of tax paid by some quarries and exempt others was unlawful.

They claimed that any state aid approval application that raises doubts about compatibility with the common market must allow any third party - in this case virgin aggregate quarry operators - to lobby against the application.

If the Court of First Instance finds that the lobbying process, or 'Stage 2 proceedings', should have been opened, then the levy is in effect illegal, the association claimed. This would leave the Government open to claims from quarriers for return of the £1.60 per tonne levy paid since the introduction of the tax in April 2002.

Some quarriers have already lodged claims for repayment as a precautionary measure because of a three-year time limit on tax rebates.

BAA director Robert Durward said: 'It has been a long wait since we first launched our case in the High Court in London. Although we lost on the day, everything we said at the time has been borne out.

'The levy is not only logically indefensible, it is also failing to deliver any tangible environmental benefit.'

He claimed that the use of primary aggregates had not been reduced by the levy and the only reason virgin aggregate use had not increased since April 2002 was because of a drop in road building and repair contracts.

Should the case go against the Government it would face a massive rethink over the tax.

Measures could include a blanket tax on all aggregates, abolishing the levy completely or altering the existing levy.