The Climate Change Levy (CCL) is a tax on energy delivered to non-domestic users in the UK. It is designed to incentivise energy efficiency and to reduce carbon emissions. Introduced on 1 April 2001 under the Finance Act 2000, the CCL has formed part of the UK’s Climate Change Programme.
The levy applies to most business users across industry, commerce, agriculture, public administration, and other services. Users in the domestic, charitable and transport sectors are typically exempt.
CCL is charged on the taxable supply of specified energy products (‘taxable commodities’) for use as fuels – e.g. lighting, heating and power. There are four groups of taxable commodities: electricity, natural gas, LPG and other commodities including coal and lignite.
When initially introduced, the CCL rates were frozen at 0.43p/kWh on electricity, 0.15p/kWh on coal and 0.15p/kWh on gas. In the 2006 Budget it was announced that the levy would rise annually in line with inflation in future, starting from 1 April 2007, and rates have since been adjusted over time.
Businesses should be aware of two recent changes that increase the financial impact of the tax:
The end of CCL exemption for renewably-sourced electricity under a renewable source contract was announced in the Government’s Autumn Statement 2015.
Reduce your CCL costs with Envantage
Please contact our team on 0800 054 2577 or firstname.lastname@example.org to discuss how we can help you reduce your costs associated with CCL:
If your business is in an eligible sector, we can enter you into a voluntary Climate Change Agreement (CCA). You will then receive substantial discounts on the CCL applied to electricity and gas in return for meeting energy efficiency targets. Envantage’s team of experienced consultants have demonstrated knowledge in successfully establishing and managing these complex agreements over a range of industries.
You can reduce CCL costs by cutting your energy consumption. Our Chartered Energy Managers can work with you to identify key areas where your business can tackle inefficiencies or invest in cost-effective energy saving technologies. We provide funding options and full implementation support as part of our extensive energy management services.
Our experienced energy procurement team can help you get the best supply contract for your business. For example, we can help evaluate whether a renewable or green supply contract is currently the most cost-effective solution as part of your wider energy and carbon management strategy.
Envantage can provide further guidance about the CCL, to ensure that you have all the insight you require. Two areas where we often receive enquiries include:
The main rates of CCL on the four groups of taxable commodities are charged at a specific rate per unit of energy. Rates are based on the energy content of each commodity and are expressed in kilowatt-hours (kWh) for gas and electricity, and in kilograms for all other taxable commodities.
All CCL rates are set out in this table. Main rates are levied at a discounted rate (which varies for each taxable commodity) for participants of the Climate Change agreement (CCA) scheme.
Taxable supplies and self-supplies
A taxable supply is the supply of a taxable commodity by an energy supplier to a business consumer that is not excluded or exempt from the main rates of CCL. Taxable supplies include self-supplies.
If you are a gas or electricity utility or a producer of LPG or other taxable commodities and consume for your own business purposes taxable commodities that you would otherwise supply on (for example, to heat and light administration buildings unconnected with your production activities) these are deemed to be self-supplies. You must account for the main rates of CCL on your self-supplies in addition to any CCL due on your supplies of taxable commodities to third party consumers.