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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 commodityRate from 1 April 2016Rate from 1 April 2017Rate from 1 April 2018Rate from 1 April 2019
Electricity (£ per kilowatt hour (KWh))0.005590.005680.005830.00847
Natural gas (£ per KWh)0.001950.001980.002030.00339
LPG (£ per kilogram (kg))0.012510.012720.013040.02175
Any other taxable commodity (£ per kg)0.015260.015510.015910.02653

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:

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:

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.

What Next?

If you would like to learn more about CCL then get in touch with us today on 01257 239509.