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EC Approves Aggregates Levy Reduction In Northern Ireland

by Amanda Banks, Tax-News.com, London

13 August 2014


The European Commission has found that the UK's reduced aggregates levy for Northern Ireland is compatible with European Union rules on state aid, four years after the credit scheme was suspended in the wake of a European General Court ruling.

The levy was introduced across the UK in 2002, to address environmental issues around the commercial exploitation of rock, sand and gravel. However, the Government judged that the levy was unlikely to achieve its environmental aims in Northern Ireland, due to specific environmental, geographical and socio-economic circumstances. Instead, the rate was for Northern Ireland was reduced by 80 percent, in return for which the industry would undertake improvements directed and monitored by the Department of the Environment

This reduction was approved by the EC in 2004, but then annulled by the EGC six years later. In its new decision, the EC finds that the full levy would have led to an excessive cost burden on companies in Northern Ireland, and that a proportionate tax level is nevertheless maintained under the reduction.

Last year, the British Aggregates Association, which represents the quarry industry in the UK, complained that another EC investigation was creating uncertainty and a fear that exemptions and reliefs would eventually have to be paid back.

TAGS: court | environment | tax | European Commission | United Kingdom | environmental tax | excise duty | extraction tax | tax breaks | Europe

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