Aggregates Tax and Devolved Taxes Administration (Scotland) Bill: business and regulatory impact assessment

Business and regulatory impact assessment (BRIA) for the Aggregates Tax and Devolved Taxes Administration (Scotland) Bill.

Purpose and intended effect


The UK Aggregates Levy (UKAL), which came into effect in April 2002, was introduced to ensure that the environmental impacts of aggregates extraction not already addressed by regulation were more fully reflected in prices. It generally applies to the commercial exploitation of primary aggregates – mostly crushed rock, gravel and sand used as aggregates in construction.

The Scotland Act 2016[1] provides the Scottish Parliament with the legislative competence to introduce a devolved replacement for UKAL. When introduced, Revenue Scotland, Scotland's tax authority for devolved taxes, will be responsible for the collection and management of the Scottish Aggregates Tax (SAT).

The Aggregates Tax and Devolved Tax Administration (Scotland) Bill was introduced to the Scottish Parliament on 14 November 2023 setting out the Scottish Government's legislative proposals for Scottish Aggregates Tax (SAT).

In addition to measures related specifically to SAT, the Bill includes a small number of wider legislative amendments to the Revenue Scotland and Tax Powers Act 2014 (RSTPA 2014)[2] . These amendments, which relate to Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT) in addition to SAT, are intended to support the efficient and effective collection of all devolved taxes by Revenue Scotland.

This BRIA considers two options in relation to these measures but, due to their narrow nature, specific commentary is not provided in a number of sections.


The Scottish Government intends that SAT will support the Scottish Government's ambitions for a circular economy, through the following objectives:

(i) Encouraging the minimum necessary exploitation of primary aggregates,

(ii) Maximising the use of secondary and recycled aggregates, and

(iii) Incentivising innovation and development of alternative materials.

The SAT will have another core objective of demonstrating the operational benefits of tax devolution, with Revenue Scotland putting in place a modern and effective digital-first approach to tax collection and management. In keeping with the approach taken for the existing fully devolved taxes, many of the technical aspects related to Revenue Scotland's collection and management of the tax will be the subject of secondary legislation.


Aggregates make an important contribution to Scotland's economy, providing materials for housing, construction, road-building and other uses, and supporting employment, including in rural and remote areas of the country. Aggregates are also required as construction materials to support net zero ambitions, including for diversification of the energy mix. They are used both in and of themselves and mixed with other materials to produce new products used in construction such as mortar, asphalt and concrete.

Aggregates are extracted and sourced across Scotland. Operating quarries which produce crushed rock, or quarries and wharves where sand or gravel is extracted or landed, are found in nearly all 32 local authority areas. Crushed rock is extracted predominantly in the north of Scotland and along the west coast, whereas sand and gravel are likely to be extracted in southerly areas.

Whilst it should not be taken as an exact guide to the potential revenue impact of a devolved tax, the illustrative forecast produced by the Scottish Fiscal Commission estimates that the 2022/23 Scottish share of revenue from UKAL is £59 million.

The Scotland Act 2016 provided the Scottish Parliament with powers to legislate for a tax that would replace UKAL in Scotland. Development of proposals for SAT was deferred until the conclusion of litigation related to aspects of the UKAL legislation, and a recent review[3] of UKAL. The UK Government review, and the process of consultation associated with it, has assisted the Scottish Government's understanding of the arrangements for UKAL, the underpinning rationale for key elements of the tax, and the views of the industry in Scotland on devolution. In addition, the Scottish Government commissioned its own research into potential options for a SAT[4].

The Scottish Government's Framework for Tax[5] provides the foundation from which SAT has and will be designed and delivered. The Framework ensures that decisions on tax policy are coherent and rooted in a defined set of principles and strategic objectives, rigorously appraised and developed through an established policy cycle, which puts proactive engagement with stakeholders and partnership working with Revenue Scotland at the heart of tax policy making.

The SAT is intended to align with wider Scottish Government ambitions to deliver a fair, green and growing economy; in particular, the Scottish Government's ambitions for a circular economy. Creating sustainable and inclusive growth is a key part of the National Performance Framework's (NPF) purpose and the circular economy contributes to the Environment and Economy outcomes[6].

The circular economy aims to minimise our demand on primary resources and maximise the re-use, recycling and recovery of resources. The draft Circular Economy Route Map to 2025 and beyond[7] sets out the importance of embedding circular construction practices to reduce resource needs, reduce waste and carbon, and encourage refurbishment and reuse. SAT will support the Scottish Government's ambitions for a circular economy, in particular the ambition to embed circular construction practices. SAT will serve as a price signal which complements other circular construction measures.



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