SEL Group Consultancy Stafford

What is the Climate Change Levy (CCL) &

 Climate Change Agreement (CCA)?

 The Climate Change Levy (CCL) is a tax on energy delivered to non- domestic users in the United Kingdom.

Climate Change Agreements (CCA) are voluntary agreements made by UK industry and the Environment Agency to reduce energy use and carbon dioxide (CO2) emissions. In return, operators receive a discount on the Climate Change Levy (CCL).

 

SEL Group Consultancy Stafford

Who do CCL and CCA apply to?

Business and public sector users of energy, gas and electricity utilities and suppliers of solid fuels and liquefied petroleum gas (LPG).

 

 What  are the changes to CCL and CCA in 2019?

 HMRC state that for 2019 to 2020, the balance between rates on taxable commodities will be updated to reflect changes in the fuel mix used in electricity generation and the increase in main rates of CCL will recover the tax revenues lost by closing the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme.

 

Climate Change Levy main 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 KWh) 0.00559 0.00568 0.00583 0.00847
Natural gas (£ per KWh) 0.00195 0.00198 0.00203 0.00339
LPG (£ per kg) 0.01251 0.01272 0.01304 0.02175
Any other taxable commodity (£ per kg) 0.01526 0.01551 0.01591 0.02653

Climate Change Levy reduced rates

Taxable commodity Rate from

1 April 2016

Rate from

1 April 2017

Rate from

1 April 2018

Rate from

1 April 2019

Electricity 10% 10% 10% 7%
Natural gas 35% 35% 35% 22%
LPG 35% 35% 35% 22%
Any other taxable commodity 35% 35% 35% 22%

A statutory instrument will be introduced before April 2019 to amend the formula in the Regulations.

 

 How much will it cost? 

Industry commentators are suggesting that energy costs are estimated to rise by 20% in 2019, with an increase of 52% for electricity and 74% for gas.

Companies are advised to calculate the impact of the stated rate changes to their energy usage and budget in accordance with these changes.

 

 

The information  provided by the author is intended for guidance only and companies should consult either the HMRC CCL Guidance or the proposed regulations 2019.

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