Encourage sustainable construction – gov.scot

Consulting on devolved taxation to support Scotland’s circular economy.

A new decentralized tax will encourage greater use of recycled materials and other sustainable materials by the construction industry.

A consultation has started to inform future legislation on the replacement of the UK Aggregate Tax. The royalty is due when newly mined products like sand or rock are used for commercial purposes, including house building, infrastructure and landscaping.

The Scottish Government intends Scottish Aggregates Levy to support the circular economy by encouraging the use of recycled aggregates in the construction industry and supporting innovation.

The consultation is seeking views to help inform the Scottish Government’s final approach to the Scottish Aggregate Tax Bill, outlining key provisions for a future tax. It invites comments on a range of questions, including:

  • the rationale and scope of the tax and whether exemptions and reliefs should be included in the legislation
  • operational arrangements, including how best to use online technology
  • the case for introducing a new sustainability fund and the type of projects such a fund could help

Public Finance Minister Tom Arthur said:

“The extraction and production of aggregates like crushed rock and sand creates and supports jobs, many of them in our rural communities. However, we know that the extraction of new materials can also have an impact on the environment.

“These proposals aim to increase recycling and reuse rates, help the construction industry meet its climate and sustainability commitments and protect Scotland’s natural environment by reducing the need for materials virgins.

“It will also support the ambitious goals of our National Economic Transformation Strategy for green and sustainable economic growth and result in a greater proportion of the Scottish budget being raised directly in Scotland.

“I want to make sure this tax is well designed, takes full account of the Scottish context and maximizes the opportunities offered by devolution. I encourage all interested individuals and organizations to respond to this consultation.


Read the consultation on a Scottish Aggregate Tax Bill

The Program for Government 2022-23, published on 6 September 2022, sets out a commitment to introduce a Scottish Aggregate Tax Bill. A bill is due in the Scottish Parliament next year and the introduction of the tax is tentatively scheduled for 2025.

As with other fully decentralized taxes, rates will be set at a later date through secondary legislation, depending on factors such as economic and environmental considerations.

The collection and administration of devolved tax will be administered by Revenue Scotland. The Scottish Revenue Commission estimates that Scotland’s share of UK aggregate tax revenue for 2022/23 is £59m.

Revenue Scotland is responsible for collecting and administering devolved taxes – currently the Land and Property Transactions Tax and the Scottish Landfill Tax, which came into force on 1 April 2015. Revenues of nearly £5 billion pounds sterling were collected. Revenue Scotland is responsible to the Scottish Parliament and operates independently of the Scottish Government.

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