Taxable and exempt aggregate
Section 5: Taxable aggregate
16.This section sets out the fundamental legal basis of the new Scottish aggregates tax, that tax is only to be charged on taxable aggregate as defined here: that is, on any occasion on which aggregate is subject to commercial exploitation in the circumstances set out in section 7 of the Act, it is taxable, unless specifically exempted under section 6.
Section 6: Exempt aggregate
17.This section defines the types of aggregate that are exempt from Scottish aggregates tax, setting out each exemption in subsections (2) to (8).
18.Subsection (2) provides that aggregate is exempt from the tax if it is, or derives from, any aggregate that has already been subjected to a charge to tax. Subsection (9) clarifies that for these purposes aggregate has already been subjected to a charge to tax, and therefore this exemption will apply, if there was no entitlement to a tax credit against at least some of the tax previously charged on the aggregate – or if there was, then the amount of the credit was less than the amount of the tax. So conversely, if there has previously been tax credit applied of the same amount than the amount of tax, then the exemption from tax under subsection (2) would not apply, and tax would be chargeable.
19.In addition, subsection (10) provides that previous tax credits relating to specific industrial or agricultural processes (see section 15(6) of the Act) are to be disregarded for these purposes, and so in such cases, the previous tax is effectively counted as tax in which there was no entitlement to tax credit – so the exemption under subsection (2) would still apply.
20.Finally, subsection (9)(b) provides that the exemption under subsection (2) would also apply where, before the date on which section 6 of the Act comes into force, there has been an occasion on which a charge to the UK aggregates levy has arisen under the Finance Act 2001.
21.Subsection (3) provides that aggregate is exempt from the tax if it has previously been used for construction purposes (including before the Act comes into force).
22.Subsection (4) provides that aggregate is exempt from the tax if, on the date on which this section comes into force, it is on a site other than either its originating site (see section 9) or a site that is required to be registered under section 18 under the name of the site operator.
23.Subsection (5) provides that aggregate is exempt from the tax if it consists wholly of aggregate won by being removed from the ground incidentally during the excavation of transport or utilities infrastructure (for instance during the building of roads), and in connection with the construction, modification or improvement of that structure or infrastructure.
24.Subsection (6) provides that aggregate is exempt from the tax if it consists wholly of aggregate won in the course of dredging carried out exclusively for the purpose of creating, restoring, improving or maintaining a river, canal, watercourse, channel or approach.
25.Subsection (7) provides that aggregate is exempt from the tax if it consists wholly of the spoil from any process by which coal, lignite, slate, or a substance listed in section 4(3) of the Act has been separated from other rock after being extracted with that other rock.
26.Subsection (8) provides that aggregate is exempt from the tax if it consists wholly or mainly of the substances listed, including coal.
