Scottish Aggregates Tax - proposed approaches to cross-border taxation
Overview
The Scottish Government is seeking views on options for approaching cross-border taxation for Scottish Aggregates Tax (SAT).
The Aggregates Tax and Devolved Tax Administration (Scotland) Act 2024 (“the 2024 Act) provides for the key elements of a new devolved tax on the commercial exploitation of aggregates in Scotland - the Scottish Aggregates Tax (“SAT”). SAT is intended to replace UK Aggregates Levy (UKAL) from 1 April 2026. This is subject to the successful introduction of secondary legislation in Scotland and UK Government legislation on UKAL.
The Scotland Act 2016 provided the Scottish Parliament with the devolved competence to legislate for the introduction of SAT. The 2024 Act was introduced to the Scottish Parliament in November 2023 and approved by the Scottish Parliament in October 2024. The legislation received Royal Assent and became an Act of the Scottish Parliament on 12 November 2024.
As a result of devolving the tax to Scotland, there will be two different tax systems operating alongside one another. This has implications in terms of the treatment of cross-border movement of aggregate and, in some circumstances, the risk of double taxation.
The Scottish Government has proactively engaged with industry representative bodies and wider stakeholders ahead of this consultation, helping to shape the options under consideration. This engagement will continue to ensure that all relevant cross-border scenarios are reflected in the design of SAT.
This consultation will run for 8 weeks from 16 June 2025 until 11 August 2025 and offers an opportunity to comment on SAT cross-border taxation of aggregate. This will ensure that SAT achieves its policy intent and does not create unintended consequences. Similarly, it is intended to highlight any other scenarios or potential issues that the Scottish Government should consider.
Views are also sought on a range of issues to inform relevant impact assessments and ensure that these are fully considered. Responses are encouraged from all interested parties.
The consultation document details the proposed approaches to cross-border taxation. This information is included in section 2. The impact assessments considered are noted in section 3 of the document. Section 4 contains further information on how to respond to the consultation.
Read the consultation paper. The consultation paper contains full background information for this consultation. You may find it useful to read or refer to while responding.
Consultation questions preview
The consultation questions are included here for your reference. Please click 'Begin consultation' at the bottom of this page to proceed.
1. Can you provide any evidence on the scale of: (1) Direct supplies (where aggregate is transported by the quarry on behalf of a middleman); (2) Direct supplies (where aggregate is collected); and/or (3) Indirect supplies (middlemen transactions)?
2. Would the declaration approach set out in this scenario be workable for suppliers and / or customers? If there are issues, can you please specify?
3. Would the inclusion of a box on a supplier’s sales ticket to indicate the customer’s destination be easy to implement? If not, can you please provide reasons.
4. Do you think the proposed approach would create any opportunities for non-compliance?
5. Are there any alternate approaches that you think should be considered?
6. What are your views on the practical application of this approach?
7. Would this approach have a business impact, administrative and/or commercial, on aggregates suppliers and middlemen?
8. Do you think the proposed approach would create any opportunities for tax avoidance?
9. Are there any alternative approaches that you think should be considered?
10. What are your views on the practical application of Option 1? For example, would there be any administrative or commercial reasons why Option 1 would not work?
11. Do you think option 1 would create any opportunities for tax avoidance, if so can you provide examples?
12. Can a middleman distinguish between over-the-counter sales and producer-based delivery sales in their accounts?
13. Can a quarry operator distinguish between sales made and delivered to a middleman (for over-the-counter sales) and sales made to a middleman but delivered to the middleman’s customer (producer-based delivery)?
14. Would you propose any amendments to Option 1? If so, can you please provide details as to why the amendment would be an improvement.
15. What would be the business impacts of Option 1 on aggregate suppliers and middlemen?
16. What are your views on the potential requirement for middlemen to provide a declaration to Revenue Scotland to notify exempt supply? Would there be any reason why a notification would not be able to be supplied, for example?
17. What are your views on the practical application of option 2? For example, would there be any administrative or commercial reasons why Option 2 would not work?
18. Do you think option 2 would create any opportunities for tax avoidance, if so can you provide examples?
19. Would you propose any amendments to Option 2? If so, can you please provide details as to why the amendment would be an improvement.
20. What would be the business impacts of Option 2 on aggregate suppliers and middlemen?
21. Are there any further cross-border scenarios that need to be addressed in advance of the introduction of SAT? If yes, please provide as much detail as possible, setting out the factual circumstances and, if possible, your views on the best way in which to deal with these scenarios.
22. Do you think that the cross-border taxation issues set out in this consultation will in any way impact upon: (1) Equal opportunities; (2) The Fairer Scotland Duty; (3) Human rights; (4) Child rights and wellbeing; (5) Island communities; and/or (6) Sustainable development in Scotland?
23. If yes, please give us your views.
24. Do you think that the cross-border taxation issues set out in this consultation will in any way impact upon: (1) The Consumer Duty; (2) Local government; (3) Business and regulations; (4) Privacy; and/or (5) Digital approaches?
25. If yes, please give us your views.
Useful information about responding to this consultation
As you complete your response, each page will provide the option to 'Save and come back later' at the bottom. This means you can save your progress and return to the consultation at any time before it closes. If you don't use this feature and leave the consultation midway through, your response will be lost.
Once you have submitted your response, you can enter your email address to get a pdf copy of your answers sent to you.
On the 'About You' page at the end of this consultation, organisations will have the opportunity to tell us more about their work and/or how their response was informed.
After the consultation has closed there will be a few months delay before any responses are published. This is because we must check any responses to be published abide by our Terms of Use.
An analysis report will usually be published some months after the consultation has closed. This report will summarise the findings based on all responses submitted. It will be published on the Scottish Government website and you may be notified about it if you choose to share your email address with us. You can also join our consulation mailing list where we regularly list newly published analysis reports (as well as new consultations).
Why your views matter
This consultation offers an opportunity to comment on approaches to cross-border taxation for Scottish Aggregates Tax (SAT). This will ensure that SAT achieves its policy intent and does not create unintended consequences. Similarly, it is intended to highlight any other scenarios or potential issues that the Scottish Government should consider.
Views are also sought on a range of issues to inform relevant impact assessments and ensure that these are fully considered. Responses are encouraged from all interested parties.
The Scottish Government will carefully consider all responses to the consultation, prior to finalising SAT cross-border policy.
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