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The BAA said that although it had been warning the UK Government since 2002 that a large number of quarry operators were having their livelihoods threatened by suspect exemptions to the aggregates levy, government Ministers had chosen to ignore the Association in the mistaken belief that its legal challenge would fail.
The EU Commission issued a decision in March this year following its 18-month Phase II investigation into the aggregates levy exemptions. Although most exemptions were found to be lawful, the decision supported the BAA’s position by finding illegal state aid (in the case of shale aggregate) and ordered that this should be recovered from its recipients.
HMRC has now begun the process of recovering the unpaid levy by sending legally enforceable questionnaires to the companies concerned.
The BAA says the vast scale of this problem will come as a massive shock to those affected. The Association estimates that a company which sold just 100,000tonnes/year of shale aggregates between 1 April 2002 and 31 March 2014 will now owe the Treasury €3.02 million (£2.15 million). Furthermore, it has been calculated that compound interest could add another €1.18 million (£840,000) to this liability.
HMRC has said that although it will be sympathetic to those struggling to repay the illegal state aid, it will not be possible to avoid complying with the EU order.
As a number of BAA members have been caught up in this situation, the Association says it has been compelled to seek additional legal advice. Any operator who is concerned about this issue is advised to contact the Association without delay through the normal channels.
BAA director Robert Durward said: “The ill-conceived aggregates levy continues to cause havoc within the aggregates industry. Not only have we repeatedly warned the Treasury about this danger, on several occasions we have also offered to settle the dispute on an amicable basis. The Government now needs to take decisive action to prevent dozens of companies being made bankrupt.”
