The Climate Change Levy is an energy tax for non-domestic users
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.
There are four groups of taxable commodities: electricity, natural gas, LPG and other commodities (including coal and lignite).
What are the CCL rates?
All CCL rates are set out in this table.
When the levy was initially introduced, the CCL rates were frozen at 0.43p/kWh on electricity, 0.15p/kWh on coal and 0.15p/kWh on gas. They have risen substantially since then.
Two recent changes will further increase the financial impact of the CCL:
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
With the right expertise, you can reduce the cost impact of the CCL in several ways:
Climate Change Agreements
If your business is in an eligible sector, you can enter into a voluntary Climate Change Agreement (CCA). You will then receive substantial discounts on the CCL applied to electricity and gas. Discounts will increase in April 2019 when the CCL rates go up, and we recommend that you act quickly to get your agreement in place. Envantage’s consultants have an excellent track record of successfully establishing and managing these complex agreements over a range of industries.
Reduce your CCL costs by cutting 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. We can also clarify whether a green electricity contract is appropriate for your wider energy and carbon strategy.
To discuss these opportunities and how to best reduce your costs associated with the CCL, please call Envantage today on 0800 054 2577 or email email@example.com.
Two areas where we often receive enquiries include:
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.
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.
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.
Do you require further support or have additional questions? Speak to our consultants today by calling 0800 054 2577 or emailing firstname.lastname@example.org.