Quarry firms head to court in battle against taxman

A GROUP of Scottish quarry firms are to take a dispute with HM Revenue & Customs over unpaid taxes to the courts this week in a bid to halt the seizure of millions of pounds of assets.

Eight aggregates companies in Scotland have been issued with summary warrants ordering them to meet the taxman’s claims for unpaid aggregates levies.

The warrants give the quarry operators – who are questioning the legality of the levies – just 14 days to pay or risk assets being seized and sold.

They are now seeking a judicial review against the use of the summary warrants which they argue is seeing them treated differently to quarry operators in England, who are also disputing the legality of the levies.

A QC hired by a number of Scottish quarry operators will make the application at the Court of Session in Edinburgh on Tuesday.

Robert Durward, managing director of Cloburn Quarry in South Lanarkshire who has himself now been issued with a summary warrant, said: “We think HMRC have acted against their own guidelines in issuing these summary warrants as we are not being given the chance to defend ourselves and are being treated differently to firms outside Scotland. They just turn up with the warrant and say you have to pay or we will sell your assets.”

Durward said the English companies have not had warrants served as they have effectively been suspended until October when the wider case over the legality of the tax is due to be heard.

Durward set up the British Aggregates Association (BAA) after the levy was introduced in April 2002. He said 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.

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.

He has written to Justice Secretary Kenny MacAskill over the use of summary warrants in the case and said he had been told the issue would be looked into.

Regardless of the outcome of this week’s court hearing, Durward has said he will not pay and is prepared to face the consequences. He 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.