Regulatory And EU Alignment Impacts
Intra-UK Trade Impacts
The Scottish Government recognises that some taxpayers will commercially exploit aggregate in Scotland and the rest of the UK and will therefore have to register for both UKAL and SAT. The 2019 Aggregate Minerals Survey for Scotland shows that in 2019, approximately 2.5 million tonnes of aggregate were moved from Scotland to the rest of the UK, mainly in the form of crushed rock, while approximately 0.08 million tonnes were moved to Scotland from quarries in the rest of the UK.
Powers in relation to SAT were devolved to the Scottish Parliament in the Scotland Act 2016. The Internal Market Act 2020 does not apply to SAT as the Act states that that United Kingdom market access principles do not apply to any legislation so far as it imposes, or relates to the imposition of, any tax, rate duty or similar charge.
However, under the proposals set out in the Bill, SAT is not considered likely to have any significant impact on intra-UK trade. Primary aggregate producers throughout the UK already pay the UKAL and following introduction of SAT, aggregate moved from the rest of the UK to Scotland will be taxed on the same basis as aggregate produced in Scotland. Taxable primary aggregate produced in the UK should be subject to either UKAL or SAT but not both.
The Scottish Government and Revenue Scotland will work with the aggregates industry, other relevant stakeholders and the UK Government to ensure that there is a smooth transition from UKAL to SAT and that the ongoing administration of SAT does not impact on intra UK trade.
The 2019 Aggregate Minerals Survey for Scotland shows that in 2019, approximately 3.7 million tonnes of aggregate was exported from Scotland to a destination outside the UK, while negligible amounts were imported to Scotland from outside the UK.
Based on the provisions in the Bill, SAT is not considered likely to have any impact on international trade. Imported aggregate would be subject to SAT on the same basis as domestic aggregate. A tax credit would continue to be available for aggregate exported outside the UK, which maintains the current approach under UKAL.
The Scottish Government's Environment Strategy sets out our long-term strategic ambitions and policy priorities for the environment. The Strategy supports the Scottish Government's objective to maintain or exceed EU environmental standards. One of the Strategy's outcomes, that we use and re-use resources wisely, is strongly aligned with a key objective of SAT.
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