Aggregate Advantage: Government Paves the Way for Devolution of AGL to Scotland

On Budget Day the Government also announced some changes to the UK aggregates levy regime designed to facilitate the devolution of the aggregates levy to the Scottish Government (scheduled to take effect from April 2026). This legislative update is an important step in the UK’s ongoing process of devolving fiscal powers to Scotland, allowing the Scottish Government to set and manage its own aggregates levy independently from the rest of the UK.

Importantly, these changes provide more detail on the management of cross-border movements of aggregate materials between Scotland and other parts of the UK. Previously, there was a notable risk of double taxation when aggregate was transported across the UK border. This issue had been a major concern for businesses operating in the aggregates sector, particularly those whose operations involve the movement of materials across the Scottish Border (on and offshore).

The new measures directly address this risk by introducing provisions that ensure aggregate is not taxed twice as it moves between different UK jurisdictions. The legislation sets out clear rules for determining where and when the levy is chargeable and provides mechanisms for relief or exemption where appropriate. This approach is designed to create a fair and efficient system that supports the smooth operation of the aggregates market across the UK, while respecting the new devolved arrangements.

For businesses, these changes are a positive development. By removing the threat of double taxation, the reforms provide greater certainty and stability for companies involved in the extraction, processing, and movement of aggregate materials. This should help to maintain a level playing field, reduce compliance costs, and support continued investment and growth in the sector as the devolution of the aggregates levy is implemented.