British Aggregates Association loses its challenge on the legality of UK aggregates tax

EU judges decided last week that the British Aggregates Association’s challenge against the UK’s aggregates tax should be dismissed.

The £1.60 per tonne tax on freshly dug aggregates, which generates about £360m a year in revenue, was being challenged by the BAA at the European Court of First Instance, an independent court attached to the European Court of Justice.

The BAA had claimed the legitimacy of the European Commission’s decision to approve the tax in 2002 was unsafe and distorted competition.

Aggregates producers had been advised to file precautionary claims, totalling £36m, against the Treasury for the repayment of levy. It had been predicted that a victory for the BAA, and a subsequent abolition of the tax, would have meant a reduction to the price per tonne of some aggregates.

Graham Alty, a partner at law firm Pinsent Masons, said: "The dismissal of the challenge by the BAA and that fact that the court also refrained from altering the current rate of tax imposed or creating any exemptions to its application, will come as a huge relief for the UK government and means that any supply chain members anticipating future gains as a result of the abolition or reduction of the levy will now be bitterly disappointed."