Changes to the Climate Change Levy (CCL) came into effect on the 1st April 2020. The changes are in line with the government’s continued commitment to rebalance the costs applied to electricity to gas bills and ensure charges are fairly apportioned. This latest change will make gas CCL costs 60% of the electricity CCL charge. The rate change (an increase in gas and a reduction in electricity) should appear in your next invoice.
The CCL is a UK wide environmental tax charged on the electricity and gas consumption of businesses and the public sector. It was first introduced in 2001 and in 2019 its scope was widened to include the former Carbon Reduction Commitment (CRC) as a source of revenue generation. The CCL has been designed to encourage businesses to be more energy efficient in how they operate.
The main rates on electricity, gas and other fuel commodities are paid to HMRC by energy suppliers who pass on the costs, through billing, to their non-domestic customers. To find out more about the CCL read our guide.
The main rates will be amended for 2020 to 2021 and for 2021 to 2022. The table below outlines the updates:
|Commodity||Rate from 1st April 2019||Rate from 1st April 2020||Rate from 1st April 2021|
|Electricity||0.847 p/kwh||0.811 p/kwh||0.775 p/kwh|
|Gas||0.339 p/kwh||0.406 p/kwh||0.465 p/kwh|
|Petroleum or other gaseous hydrocarbon in liquid||2.175 p/kwh||2.175 p/kwh||2.175 p/kwh|
|Any other taxable commodity||2.653 p/kwh||3.174 p/kwh||3.640 p/kwh|
It is important to factor these changes into your budgets, especially if you have a high gas usage, due to a higher charges in future years.
If your business benefits from a Climate Change Agreement, your percentage reduction against the CCL charges will also change effective 1 April 2020 and 2021. The table below shows the new eligible reductions:
|Taxable Commodity||Rate from 1st April 2019||Rate from 1st April 2020||Rate from 1st April 2021|
|Petroleum or other gaseous hydrocarbon in liquid||78%||77%||77%|
|Any other taxable commodity||78%||81%||83%|
You will need to resubmit both your PP10 and PP11 forms to your supplier and HMRC, with an effective date of 1st April 2020. Speak to your Client Guide for help and guidance on this.
We can help limit your CCL exposure by providing an independent energy audit. You will receive a report detailing what energy you use, how you use it and what you can do to lower it. The report is completely unbiased and is designed to be used as a tool to support any future energy reduction projects. A typical audit for one site takes about a day and is not disruptive. Relevant physical distancing guidelines would be followed, and PPE used. If you prefer, due to the current COVID-19 restrictions, an initial desk based analysis could be completed with the on-site audit to follow at a later date. Speak to you Client Guide for more information.
For more information please do not hesitate to get in touch with us and we would be happy to discuss further with you.