Gravel Voice
28 Apr 2005
The Railway Forum has spoken out against government discrimination against the rail industry, regarding a tax on ballast.
The Aggregates Levy, introduced by Gordon Brown in 2002, was seen as a welcome step to discourage the use of newly quarried material and encourage the recycling of stone and ballast. Unfortunately the Levy also applies to spoil taken from new rail tunnels and earthworks and used on adjacent developments.
It even applies to this spoil when it is mixed with lime and used elsewhere on the railway project for embankments and other purposes.
Amazingly this charge does not apply to road construction. The result on big projects, such as the Channel Tunnel Rail Link, is a multi-million pound surcharge on the sensible recycling of material.
‘I would like to see an examination question for taxation specialists to explain why a charge for the sensible recycling of material should be levied on the railways whilst roads are exempt,’ says Adrian Lyons, Director General of the Railway Forum. ‘I think they would be hard pressed to come up with any answer that made sense. This is an anomaly the Chancellor must remove as quickly as possible.’
Section 17 (3) of the Finance Act 2001 specifically exempts aggregate if it is won by being removed from the ground in a number of specific situations. These include excavations for buildings, dredging of watercourses or removal along the line of a highway or proposed highway. There is however no specific reference to aggregate removed along the line of a railway.
Despite requests to HM Customs and Excise they are unfortunately unable to accept that the word ‘highway’ in the Finance Act 2001 could be interpreted as including a railway. Without exemption the costs incurred in respect of railway projects are currently greater than equivalent road projects by virtue of the additional aggregate levy that is applied.