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EC approves state aid for aggregates levy credit scheme in Northern Ireland

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The EC published on Monday full details of its decision to rule in favour of the UK government’s aggregates levy credit scheme (ALCS), confirming that it was in line with state aid rules. The aggregates levy is an environmental tax on commercially exploited aggregates, and the credit scheme, which ran from 1 April 2004 to 30 November 2010, gave an 80% tax credit for aggregates originating in Northern Ireland in return for quarries meeting environmental standards.

The EC, which had originally approved the scheme in 2004, investigated the scheme after the British Aggregates Association (BAA) claimed that the scheme provided unlawful state aid. The ALCS was suspended from 1 December 2010 as a requirement of the investigation, but the government says it is committed to reinstating the scheme pending further EC approval.

Exchequer secretary to the Treasury, Priti Patel said: ‘We welcome this decision, which ends a period of unnecessary uncertainty for quarry operators in Northern Ireland.’

The EC’s decision also sets out the requirement for the UK to implement a scheme which will reimburse 80% of the levy paid on aggregate imported into Northern Ireland from other member states between 1 April 2004 and 30 November 2010. The government will legislate for this in 2015, and HMRC will shortly set out more details.

Categories: News , International taxes