This brief clarifies HM Revenue and Customs (HMRC) policy
concerning the interpretation of aggregates levy industrial and
agricultural processes relief code 018 in relation to asphalt.
Who needs to read this?
Manufacturers of filler, limestone dust and producers of
Regulation 13(2)(c) of the Aggregates Levy (General)
Regulations 2002 allows an aggregates levy credit where taxable
aggregate is used in any of the processes listed in the Schedule to the
General Regulations which sets out the industrial and agricultural
Code 018 of this schedule allows a tax credit when the taxable
aggregate is used in the ‘manufacture of fillers for coating, sealants,
adhesives, paints, grouts, mastics, putties and other binding or
modifying media’ rather than where aggregates are used for other
qualities such as for bulk in construction.
use of filler in the manufacture of asphalt
Asphalt is a liquid or semi-solid form of petroleum, but the
term can be used to mean both this natural substance and also the
manufactured form of the substance. In this brief the term refers
exclusively to the manufactured form.
Asphalt is typically composed of a mixture of aggregate bound
together by bitumen or tar. Its primary use is in road construction
where it is mixed with aggregate particles to create asphalt concrete.
It is also used in waterproofing products including production of
roofing felt and for sealing flat roofs.
Aggregates levy credit has, in some cases, been claimed for
fine aggregate particles, used in the production of asphalt. This was, HMRC now
believes, on the incorrect understanding that relief under Code 018
extended to any aggregate that has a binding function.
of the interpretation of Code 018
To meet the conditions of Code 018 it is not sufficient for
the filler itself to act as a binder. The legislation requires that the
filler must be used in the manufacture of a product that is itself a
Where filler is used in the production of asphalt it becomes a
constituent of a solid construction material. As asphalt is not a
binding material it does not meet the criteria for aggregates levy
Date of implementation
As this brief clarifies the tax treatment of filler used in
the production of asphalt it takes effect immediately. However, where
any business has previously agreed a method of calculating relief for
filler used in the production of asphalt with HMRC that is
contrary to this policy, we will allow a transitional period of three
months from the date of this Revenue and Customs Brief before
implementing the change.
Updating public notices
Notices AGL 1 Aggregates Levy and AGL 2 Industrial and
Agricultural Processes Relief will be amended to be consistent with
this brief. Once this has been done, this brief will be withdrawn.
If you have any questions about the issues arising from this
brief, please contact our Unit of Expertise:
Telephone: 03000 557 116 or Email: