Overview of the Act
5.Introduced in 2002 pursuant to the Finance Act 2001, the UK Aggregates Levy is an environmental tax that aims to reduce the extraction of primary (i.e. fresh or new) aggregate. It generally applies to the commercial exploitation of primary aggregates – mostly crushed rock, gravel and sand – used as bulk fill in construction. These materials can have been either dug from the ground, dredged from the sea in UK waters or imported. Commercial exploitation is triggered when the aggregate is removed from its originating site; part of a supply agreement; used for construction purposes; or mixed with another substance other than water. Aggregate exported outside the UK is exempt from the UK Levy.
6.The Scotland Act 2016 empowered the Scottish Parliament to legislate for a devolved tax to replace the UK Levy. This Act implements this power, with the same environmental aims.
7.Part 1 of the Act establishes the new tax on the commercial exploitation of aggregate in Scotland, and is broken down into the following Chapters:
Chapter 1 – The tax: this Chapter defines the tax and gives responsibility to Revenue Scotland to administer and collect the tax;
Chapter 2 – Key concepts: this Chapter defines the fundamental concepts underlying the tax, including what aggregate is taxable, what aggregate and processes are exempt from the tax, what is commercial exploitation, and who is liable to pay the tax;
Chapter 3 – Calculation of tax: this Chapter sets out how the amount of tax is to be calculated and gives a power to the Scottish Ministers to set the rate of tax;
Chapter 4 – Administration: this Chapter contains various provisions on tax administration, including regarding registration, tax returns, and special cases;
Chapter 5 – Penalties: this Chapter imposes penalties in relation to the tax, for instance for failure to make a return, failure to pay tax, and failure to register for tax;
Chapter 6 – Reviews and appeals: this Chapter makes provision on what decisions by Revenue Scotland in relation to the tax can be reviewed or appealed;
Chapter 7 – Interpretation: this Chapter defines the key terms used in Part 1.
8.Part 2 of the Act contains 6 substantive provisions making separate amendments to the administration of devolved taxes by Revenue Scotland under the 2014 Act: a power for Revenue Scotland to refuse a repayment claim for tax where the claimant has failed to pay other devolved tax due; a provision clarifying the penalty in the 2014 Act for failure to pay land and buildings transaction tax; a provision clarifying the legal continuity of acts by different designated officers of Revenue Scotland and clarifying how summary warrants for the recovery of unpaid amounts of tax are to be executed; a power for the Scottish Ministers to make regulations on the use of electronic communications by Revenue Scotland; a power for the Scottish Ministers to specify by regulations the circumstances in which automation can play a role in tax collection; and a power for Revenue Scotland to off-set a taxpayer debit against a credit. It also contains provision giving retrospective effect to a change to group relief in relation to Land and buildings transaction tax made in 2018.
9.Part 3 of the Act contains general provisions which apply to both Parts 1 and 2.
