BAA advises members to claim for repayment of aggregates levy

ACTING on advice from leading European and competition law firm Herbert Smith, the British Aggregates Association is advising its members to lodge claims for repayment of the aggregates levy they have paid over the past three years.

The legal advice follows a hearing in the European Court of First Instance (CFI) in Luxembourg last December, during which the BAA lodged an appeal against the European Commission’s May 2002 decision to grant the levy state aid approval.

According to the BAA, during the hearing lawyers acting for both the Commission and the UK Government were forced to admit that there was no coherent environmental justification for the aggregates levy, which currently earns the Treasury £385 million a year.

If the CFI finds against the Government, the Treasury could be forced to repay £1.3 billion or at least amend the levy system.

Although final judgment is still awaited, the BAA believes there is a real chance of a successful outcome to the proceedings and says precautionary claims are now prudent because of statutory rules which prohibit the recovery of taxes paid more than three years ago.

Commenting on the situation, BAA director Robert Durward said: ‘Although lodging these claims prior to the judgment of the CFI being delivered is a precautionary measure, it was clear at the hearing that both European Commission and UK lawyers were scraping the bottom of the barrel in trying to justify the levy.

‘All the available evidence strongly supports the view that the levy is not logically defensible in terms of its scope and environmental benefit. It also ignores the fact that the UK was already leading Europe in aggregates recycling and the use of alternatives before this legislation was introduced.’

Whether or not the BAA’s optimism turns out to be well founded remains to be seen, but the Association says the majority of its members, as well as a number of non-members, have already tabled precautionary claims.