THE head of one of the UK’s largest quarries has accused tax collectors of “arrogant and high-handed behaviour” ahead of a case this week involving millions of pounds in unpaid aggregates levies.
Robert Durward, managing director of Cloburn Quarry in South Lanarkshire, will represent one of the two companies scheduled to meet behind closed doors on Wednesday at Lanark Sheriff Court in a bid to stop collection of what they believe to be unlawful taxes.
The Lanarkshire firms are hoping to extend an interim interdict against HM Revenue & Customs (HMRC) until a potentially conclusive case in their long-running legal battle is heard in October by the Court of Appeal in London.
Durward – who set up the British Aggregates Association (BAA) after the levy was introduced in April 2002 – says a total of six quarries across Scotland have refused to pay some £10 million since the European General Court ruled against key aspects of the tax in March 2012.
“HMRC has refused all offers of putting the money into a joint account until this is settled, because it knows it would eventually have to give it back and it has no intention of ever returning that money,” Durward said.
The levy, charged at £2 per tonne of rock, gravel and sand, was designed as an environmental tax, but certain materials such as slate, clay and shale are exempt. Under European rules, such exemptions are regarded as “state aid” and are prohibited unless they are justified by the objectives of the taxation scheme.
The European Commission initially gave its blessing to the aggregates levy, but, after years of procedural applications and appeals, the European General Court partially annulled that decision.
In particular, the General Court found that the exemption for certain materials was not justified.
Durward said that, after that decision last year, HMRC should have paused in its push to collect the levy until the legal case in the UK was settled. That has been the case in England, but a loophole in Scots law has allowed HMRC to issue summary warrants against those companies that have refused to pay on the basis that the tax is illegal.
“If a tax does not have state aid approval, then it is unlawful,” he said. “HMRC should be content to wait until the main case is heard. But it is notorious for its arrogant and high-handed behaviour. It thinks it is above the law.”
Durward said that the levy claimed its first victim last year, when Skye Aggregates went into liquidation owing about two-thirds of its debts of roughly £110,000 to HMRC.
No-one from HMRC was available for comment.