Scottish Aggregates Tax (SAT) has replaced the UK Aggregates Levy for rock, sand and gravel commercially exploited in Scotland from 1 April 2026. It is charged at £2.16 per tonne, collected by Revenue Scotland rather than HMRC, and has to be paid by quarry operators and anyone else who removes, supplies, uses or mixes aggregate in Scotland in the course of business, including English, Welsh and Northern Irish suppliers who deliver into Scotland.

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What is Scottish Aggregates Tax and where does it come from?

Revenue Scotland describes SAT as the third fully devolved tax in Scotland. It is created by the Aggregates Tax and Devolved Taxes Administration (Scotland) Act 2024 (2024 asp 14), with the detailed rules on registration, returns, weighing and credits in the Scottish Aggregates Tax (Administration) Regulations 2025 (SSI 2025/374).

HMRC’s Revenue and Customs Brief 2 (2026) confirms the other side of the change: from 1 April 2026 the UK Aggregates Levy only applies to aggregate exploited in England, Wales or Northern Ireland, or moved there from a Scottish site. For how the UK levy works, see the Aggregates Levy, and for the wider picture of what Scotland now controls, see devolved taxes in Scotland and Wales.

What is taxed and at what rate?

Aggregate means rock, gravel or sand, together with whatever naturally occurs with them. Tax is charged when aggregate is commercially exploited in Scotland, which broadly happens when, as part of a business, it is:

  • removed from its originating site or a connected site;
  • made the subject of an agreement to supply;
  • used for construction purposes; or
  • mixed with anything other than water, except in permitted circumstances.

The Scottish Aggregates Tax (Applicable Rate of Tax) Regulations 2026 set the first rate at £2.16 per tonne from 1 April 2026, made under section 12 of the 2024 Act. The calculation is simply the rate multiplied by the weight in tonnes, rounded down where possible to two decimal places.

Weight should normally come from a weighbridge that complies with the Weights and Measures Act 1985, at the point of first commercial exploitation. If that is not practical, an alternative weighing method must be agreed in writing with Revenue Scotland before the return is made. Operators with an existing HMRC agreement must send Revenue Scotland the evidence they gave HMRC, or apply afresh before their first return. Failing to weigh properly can lead to a deliberate penalty.

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What is exempt?

Under section 6 of the 2024 Act, aggregate is exempt if it:

  • has already borne SAT (or UK Aggregates Levy before SAT started) and no credit has been given;
  • has previously been used in construction, such as recycled demolition material;
  • was stored on a site other than its originating site before 1 April 2026, unless that site belongs to the same registered operator;
  • is extracted unavoidably as a necessary part of construction work on the immediate site of the structure;
  • is dredged from a watercourse to create, maintain or improve it;
  • is wholly spoil from separating coal, lignite, slate or a relevant substance, or is wholly or mainly a specified substance.

Products of excepted processes, such as cutting stone with flat faces or making lime or cement, are not taxed, though spoil and by products from some of those processes remain taxable.

Who has to register with Revenue Scotland?

Anyone who commercially exploits, or intends to exploit, taxable aggregate in Scotland must tell Revenue Scotland within 30 days of the earlier of starting or forming the intention. Registration is through an online enrolment form, and returns are filed on Revenue Scotland’s SETS system. Sole traders, partnerships, companies and groups can register, and groups under common control can apply for a single group registration.

Several people can be jointly and severally liable for the same tonnage. Revenue Scotland’s guidance says that in practice only one should register and account for it, normally the site operator. Buyers should check their supplier appears on the published SAT register, because a customer who buys from an unregistered supplier who should be registered can become jointly liable.

A business that only exploits exempt aggregate does not register, but must still notify Revenue Scotland within 30 days if it exploits certain types, such as clay or waste from coal, lignite or slate processing. Non UK residents must appoint an approved UK tax representative.

How do returns, payments and credits work?

Returns are usually quarterly, on one of three staggers chosen at registration (quarters ending June, September, December and March; or May, August, November and February; or April, July, October and January). The return and payment are both due within 30 days of the end of each period. Tonnage is reported by site and by type of aggregate (rock, sand or gravel), with exempt tonnage and any agreed water discount shown separately.

Credits can be claimed on the return where taxed aggregate is later moved to elsewhere in the UK or exported in the same form, put through an excepted process, used in a prescribed industrial or agricultural process, returned to its originating site, sent to landfill or used for beach restoration, or where the customer’s debt goes bad. Bad debt credits need the invoice, proof the tax was paid, and a write off in the accounts. Records must generally be kept for five years from the return, or longer if an enquiry is open.

How are cross border supplies handled?

This is the part that most affects businesses outside Scotland. Revenue Scotland treats aggregate as exploited in Scotland if it is removed from a site or supplied and, as a result, moves into Scotland from the rest of the UK. A supplier in England, Wales or Northern Ireland that delivers to a Scottish customer must therefore register with Revenue Scotland and pay SAT, even with no Scottish presence, and then claims a credit for UK Aggregates Levy on its HMRC return. The Scottish customer does not pay SAT on that supply.

Where a Scottish customer collects from a quarry outside Scotland, the quarry must find out where the load is going and keep a signed customer declaration showing the destination and business address. A customer who gives a false declaration can face a penalty of 100% of the potential lost SAT.

In the other direction, HMRC’s brief explains that a Scottish site sending aggregate south pays UK Aggregates Levy to HMRC and claims a credit on its SAT return.

How does this work in practice?

Illustration only. A quarry in Cumbria delivers 1,000 tonnes of crushed rock to a contractor in Dumfries in May 2026.

  • The quarry registers with Revenue Scotland and shows 1,000 tonnes on its SAT return, paying £2,160.
  • It also reports the tonnage to HMRC and claims the Aggregates Levy cross border credit, keeping delivery notes and invoices as evidence.
  • The Dumfries contractor pays no SAT on the delivery, though it should check the quarry’s SAT registration.

Had the contractor collected the rock in its own lorries, the quarry would also need a signed declaration that the load was going to Scotland.

What penalties are specific to SAT?

General penalties for late returns, late payment, inaccuracies and failure to register follow Revenue Scotland’s shared rules for devolved taxes. SAT adds its own: £1,000 for failing to notify production of certain exempt aggregate or to keep records of it, £10,000 for failing to appoint or obtain approval of a UK tax representative, £250 for not notifying changes to a group application, and £500 for not notifying that a company has left a group.

What mistakes come up?

  • English and Welsh suppliers assuming their HMRC registration covers Scottish deliveries. It does not.
  • Collection sales into Scotland without a signed destination declaration.
  • Carrying over an HMRC weighing agreement without sending Revenue Scotland the supporting evidence.
  • Scottish operators deregistering from the UK levy while still sending loads south.
  • Buying from an unregistered supplier without checking the register.

For Scotland’s other environmental tax, see Scottish Landfill Tax, and for the UK equivalent, Landfill Tax.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.