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The Climate Change Levy (CCL) was first introduced by the government in April 2001 and exists to encourage business energy users to switch to a more environmentally friendly source of energy. It also allows the government to invest in renewable technologies to help the transition from fossil fuels to green energy.
The NetZero target for the UK to be carbon-neutral by 2050 (Scotland is 2045) is dependent on change; changing how we extract, purchase and consume energy. The Climate Change Levy is a tax that must be paid at the main levy rate or Carbon Price Support rate, but there are some caveats that could mean your business receives a discount.
We explore what the Climate Change Levy is, how it’s charged and rebates / exemptions.
The Climate Change Levy is applicable to most businesses and failing to register or pay the CCL charges could result in a fine of £250.
There are some organisations that are not required to pay CCL fees, these include charities conducting non-commercial activities and businesses that consume low quantities of energy (under the “de minimis level”). The threshold for a low quantity is 145kWh gas per day and 33kWh of electricity.
Every business in the public service, commercial, industrial or agricultural industry is obligated to pay the main rate for gas, electricity and other fuels, such as coal. Organisations that own generation stations or CHP stations (combined heat and power) will pay the Carbon Price Support rate.
The charges, set by the government, are detailed in the table below. Your energy supplier is tasked with charging the appropriate level of CCL, collecting these fees and paying HMRC.
Dates | Gas | Electricity | LPG |
1st April 2022 to 31st March 2023 | 0.568p/£ per kWh | 0.775p/£ per kWh | 0.2175p/£ per KG |
1st April 2023 to 31st March 2024 | 0.672p/£ per kWh | 0.775p/£ per kWh | 0.2175p/£ per KG |
Your business may be applicable for a discount with a climate change agreement. The discount rates are:
Dates | Gas | Electricity | LPG |
1st April 2022 to 31st March 2023 | 86% | 92% | 77% |
1st April 2023 to 31st March 2024 | 88% | 92% | 77% |
Energy intensive businesses that enter into a Climate Change Agreement are eligible to claim relief from their CCL obligations. The definition of an “energy intensive business” is clearly explained by the government and is based on your production value.
Each year we help businesses with their PP10 and PP11 forms which informs the government and supplier of the relief on the CCL.
You may be eligible for relief from the government or exemption if you meet the criteria. You can find more information on the government website here or give us a call and our energy advisers can assist you. Businesses have contacted us because they’ve overpaid their CCL and we’ve been able to assist them in recouping their money. If you’re unsure if you have been overcharged or would like to find out more information, please get in touch.
We can offer advice and support on the full range of government energy initiatives, including CCL, EII exemption scheme, Climate Change Agreements (CCA), UK Emissions Trading Scheme (UK ETS) and Carbon Price Support (CPS).
We’ve helped companies reduce their CCL charges and been successful in recouping hundreds of thousands of pounds in rebates. Your commercial energy expert will manage this process as part of our service.
To speak to our compliance specialists about your business requirements, please call 0141 530 4152 or email enquiries@eyebrightutilities.co.uk.
We’re delighted to provide advice and support to help businesses and not for profit organisations with their energy strategy.
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Helping clients build and implement actionable strategies to manage their infrastructure, reduce their costs and strive to achieve sustainable solutions is the driving force behind everything we do.