Quarry firms told to pay HMRC pending appeals

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Scottish quarry firms who had been withholding about £10 million in disputed tax will have to pay up or face assets being seized after a ruling in the Court of Session.

The firms, who banded together as the British Aggregates Association, have been fighting a lengthy legal battle against a £2 per tonne levy introduced in 2002.

They say that, because some types of rock are exempt from the levy, it breaches state aid rules. The companies had been paying the tax “under protest” but after a partial victory in a European court last year a number of them stopped handing over the money.

English-headquartered firms who are withholding the levy have not been challenged pending the outcome of an appeal but HM Revenue & Customs took out summary warrants to force a number of Scottish firms to pay. Rejecting an appeal against those warrants yesterday, Lord Boyd of Duncansby said he had not heard a convincing argument for him to depart from an English court ruling that the levy was not state aid. He also rejected pleas that the warrants breached the right to a fair and public trial.

He noted that HMRC had agreed not to use the warrants to apply for the liquidation of the companies, and said the firms would not be deprived of funds as they had already offered to place the money in a joint holding account.

A lawyer for the quarry firms had previously told the court that they feared it would be difficult to get the money back even if they eventually win their case against the taxman, but the judge said the issue of repayment “would be decided according to law”.

“The tax is one imposed by UK Parliament and stands as legal,” he said.