Increase in Climate Change Levy rates

Published on 08 January 2019

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%

 

What action should you take?

If your company does not have a CCA consider entering into one to avoid paying increased CCL rates on your energy consumption.
Download - Retail Compass New Year edition 2019 File type: PDF Size: 3786 KB

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