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HM Revenue and Customs Brief 20/15 - aggregates levy: liability of filler used in the manufacture of


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Purpose of this brief

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 asphalt.


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 processes.

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.

The 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.

Clarification 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 binding medium.

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 relief.

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.

Further information

If you have any questions about the issues arising from this brief, please contact our Unit of Expertise:

Telephone: 03000 557 116 or Email:

About the Author

© Crown Copyright 2015.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.

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Article Published/Sorted/Amended on Scopulus 2015-12-16 12:08:23 in Tax Articles

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