Delayed relief on aggregates levy
THE Chancellor of the Exchequer’s decision not to provide any immediate relief to the beleaguered construction materials sector in last week’s Budget has been greeted with disappointment by the industry.
In his 2009 Budget, Alistair Darling opted to maintain the aggregates levy at its newly increased rate of £2.00 per tonne in 2009/10, despite calls from industry for an immediate freezing, or even a complete withdrawal, of the tax.
The Mineral Products Association (MPA), which had been calling on the Treasury to freeze the levy at its 2008/09 level of £1.95 per tonne, said the Chancellor’s decision was disappointing and that, under the present economic conditions, the industry could do without a further government squeeze on the sector.
However, the 2009 Budget Report did include an announcement that the levy would be frozen at the current £2.00 rate in 2010/11, saving the industry from any further rise next year. The MPA said that while this move was welcome, the industry was in need of relief right now and a freeze this year would have been preferred.
Meanwhile, the British Aggregates Association, which had called for the complete withdrawal of the tax in light of the European Court of Justice’s recent judgement on the legality of the levy, described last week’s Budget as a ‘lost opportunity on the aggregates tax’.
It said that with virtually all current construction taking place through public purse spending, the complete withdrawal of the levy would have helped to kick-start the wider construction industry as well as assisting the Government’s case over the ECJ’s ruling.
Elsewhere in the Budget, the Chancellor announced that that the standard rate of landfill tax will continue to increase by £8 per tonne on 1 April each year from 2011 to 2013, and that the lower rate for inert waste will be frozen at £2.50 per tonne for 2010/11.
In addition, fuel duty will increase by a further 2p per litre on 1 September 2009 and by 1p per litre on 1 April each year from 2010 to 2013, while VED rates for heavy goods vehicles will be frozen in 2009/10.
