The Climate Change Levy (CCL) is a tax on energy delivered to non-domestic users in the United Kingdom.
Scope and purpose
editIntroduced on 1 April 2001 under the Finance Act 2000, it was forecast to cut annual emissions by 2.5 million tonnes by 2010, and forms part of the UK's Climate Change Programme.[citation needed] The levy applies to most energy users, with the notable exceptions of those in the domestic and transport sectors.[citation needed] Electricity from nuclear is taxed even though it causes no direct carbon emissions.[citation needed] Originally electricity generated from new renewables and approved cogeneration schemes was not taxed, but the July 2015 Budget removed this exemption from 1 August 2015, raising £450m/year.[1]
Rates
editFrom when it was introduced, the levy was frozen at 0.43p/kWh on electricity, 0.15p/kWh on coal and 0.15p/kWh on gas.[citation needed]
A reduction of up to 90% from the levy may be gained by energy-intensive users provided they sign a Climate Change Agreement.[2]
Revenue from the levy was offset by a 0.3% employers' rate reduction in National Insurance. However, the Finance Act 2002 subsequently increased that rate by 1%, reversing the reduction. The revenue used to fund a number of energy efficiency initiatives such as The Carbon Trust. However, revenue recycling was removed at the Spending Review 2010, with the revenue going to the Exchequer. [3]
In the 2006 budget it was announced that the levy would in future rise annually in line with inflation, starting from 1 April 2007.[4] In the 2018 Budget, it was announced that the rates of the Climate Change Levy would be adjusted until 2022 so that the gas rate reaches 60% of the electricity rate in 2021 to 2022. [5]
Rates have changed as tabulated below.
| Fuel type | Rate |
|---|---|
| Electricity | 0.541 p/kWh |
| Gas | 0.188 p/kWh |
| LPG | 1.21 p/kg |
| Any other "taxable commodity" | 1.429 p/kg |
| Fuel type | Rate |
|---|---|
| Electricity | 0.847 p/kWh |
| Gas | 0.339 p/kWh |
| LPG | 2.175 p/kg |
| Any other "taxable commodity" | 2.653 p/kg |
| Fuel type | Rate |
|---|---|
| Electricity | 0.811 p/kWh |
| Gas | 0.406 p/kWh |
| LPG | 2.175 p/kg |
| Any other "taxable commodity" | 3.174 p/kg |
See also
editReferences
edit- ^ "Summer Budget 2015" (PDF). HM Treasury. 8 July 2015. pp. 73 and 93.
- ^ "CCL Rates and Allowances". Retrieved 1 January 2019.
- ^ "Climate Change Levy rates" (PDF). Archived from the original (PDF) on 1 January 2019. Retrieved 7 December 2018.
- ^ "Deloitte UK Budget Report 2006". Archived from the original on 10 May 2006. Retrieved 23 June 2006.
- ^ "Changes to rates for the Climate Change Levy from 6 April 2020". GOV.UK. Retrieved 16 October 2020.
- ^ HMRC Reference: Climate Change Levy rates
- ^ "Climate Change Levy rates". GOV.UK. Retrieved 25 May 2019.
- ^ "Climate Change Levy rates". GOV.UK. Retrieved 25 May 2019.
Further reading
edit- House of Commons Environmental Audit Select Committee (19 February 2008). "Reducing Carbon Emissions from UK Business: The role of the Climate Change Levy and Agreements". UK Parliament website. Retrieved 30 August 2009.
- Pearce, D. (2005). "The United Kingdom Climate Change Levy: A study in political economy" (PDF). OECD Environment Directorate, Centre for Tax Policy and Administration. Archived from the original (PDF) on 1 May 2011. Retrieved 21 January 2010.