Increase in Climate Change Levy rates
From 1 April 2019, a modified formula for calculating the reduced rate of Climate Change Levy (CCL) payable by businesses in the climate change agreement (CCA) scheme will apply as a result of the Climate Change Levy (General) (Amendment) Regulations 2018 coming into force.
Why does it matter?
The 2019-2020 increase to the main rate of CCL is greater than an increase in line with the Retail Price Index (RPI) because the government is seeking to recover the tax revenue lost from the closure of the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. The new rates (and the old) are as follows:
|
Taxable commodity |
Rates from 1 April 2018 |
Rates from 1 April 2019 |
|
Electricity (£ per kilowatt hour) |
0.00583 |
0.00847 |
|
Natural gas (£ per KWh) |
0.00203 |
0.00339 |
|
Liquefied petroleum gas (LPG) (£ per kg) |
0.01304 |
0.02175 |
|
Any other supplies (£ per kg) |
0.01591 |
0.02653 |
However for business with a CCA the government decreased the percentage of the CCL main rates that it must pay. This is to ensure that the CCL paid by such businesses does not increase by more than inflation. The new (and old) percentage of the main rates payable by businesses in the CCA scheme are set out below.
|
Taxable commodity |
Rates from 1 April 2018 |
Rates from 1 April 2019 |
|
Electricity |
10% |
7% |
|
Natural gas |
35% |
22% |
|
LPG |
35% |
22% |
|
Any other supplies |
35% |
22% |