U.K. Aggregate Tax

Following the example of Denmark, France, Sweden, and the Netherlands, the

United Kingdom recently enacted a tax on commercial use of aggregate. The tax affects U.K.-extracted as well as imported sand, gravel, and rock, with some exceptions. To ensure international competitiveness, exported aggregate is exempt from the tax. The U.K. Customs and Excise Department introduced the tax to address societal costs of impacts such as noise, dust, and habitat destruction resulting from aggregate extraction. Shy of the environmental cost of £1.80/tonne ($2.75/ton) of primary aggregate extracted estimated by the Department for the Environment, Transport and the Regions, the tax is set at £1.60/tonne ($2.45/ton). Revenues will go toward a reduction in corporate National Insurance contributions and the formation of a £35 million ($53.5 million) Sustainability Fund, making the policy revenue-neutral for the government and beneficial to businesses not involved with the extraction of aggregate. The tax should encourage more efficient use of aggregate, including recycling and will, in effect, lower the cost of wood structures, which in the U.K. are considered better environmentally, relative to conventional construction practices. Visit the Customs and Excise Web site at

www.hmce.gov.uk for further information.