Climate Change Levy (CCL)
The Climate Change Levy (CCL) was introduced in order to increase the energy efficiency of UK businesses and to reduce the nation’s greenhouse gas emissions.
To put it simply, the Climate Change Levy is a tax on the amount of energy an organisation (industrial, commercial and public sector) uses and is added to energy bills as a separate item to VAT. This money is then used to support energy efficiency and carbon reduction measures.
Current CCL rates
|Taxable commodity||Rate from 1 April 2016||Rate from 1 April 2017||Rate from 1 April 2018||Rate from 1 April 2019|
|Electricity (£ per kilowatt hour (KWh))||0.00559||0.00568||0.00583||0.00847|
|Natural gas (£ per KWh)||0.00195||0.00198||0.00203||0.00339|
|LPG (£ per kilogram (kg))||0.01251||0.01272||0.01304||0.02175|
|Any other taxable commodity (£ per kg)||0.01526||0.01551||0.01591||0.02653|
You can find the latest CCL rates in the table below:
Note: facilities taking part in the Climate Change Agreements Scheme with the Department of Energy and Climate Change are eligible to pay a reduced rate of CCL – from 10%.
Who is affected by the CCL?
The Climate Change Levy applies to all energy supplies to the industrial, commercial, agricultural and public service sectors. It does not, however, apply to the following:
- Fuel consumed for producing other forms of energy (electricity, for example) or for non-energy purposes.
- Energy consumed by registered charities for non-business use.
- Fuel consumed by domestic consumers (households) or businesses in the transport sector.
- Deminimus energy consumed by very small businesses.
What energy is taxable under the CCL?
A range of energies are taxable under the CCL – including electricity, natural gas, coal, lignite, petroleum and hydrocarbon gas (as liquids).
Commodities that are exempt from the CCL are:
- Oils which are already subject to excise duty.
- Fuels used by good quality CHP (combined heat and power) schemes.
- Fuel used as a feedstock.
- Electricity used for certain process – such as the chlor-alkali process, or primary aluminium smelting.
Climate Change Levy Benefits?
Your business may be required to pay additional tax under CCL so it is worth knowing why and what benefits it brings. The Climate Change Levy has already, and is continuing to play a significant role in reducing the UK’s greenhouse gas emissions. The overall aim of the Levy is to promote energy efficiency and encourage investments in new types of energy in order to protect the environment.
If you would like to learn more about CCL then get in touch with us today on 01257 239509.