The Climate Change Levy (CCL) is an environmental tax. This tax encourages businesses to be more environmentally aware. It was launched in April 2001, as part of the UK’s Climate Change Programme. The tax aims to deter UK businesses from heavy reliance on fossil fuels (electricity, gas and solid fuels). The tax is designed to encourage switching to green energy – solar, wind and hydropower.
Who pays CCL?
Industrial, commercial, agricultural or public service sectors are all subject to the main CCL rates.
Some exemptions do apply. Your business may be exempt if you are:
- A small business using very little energy (less than 33 kWh (electricity) and/or 145 kWh (gas) a day)
- Domestic energy user
- Charity engaged in non-commercial activities
In addition, your business energy usage may be exempt from CCL if the energy:
- Won’t be used in the UK
- Won’t be used as fuel
- Will be used to generate electricity
- Been supplied from certain combined heat and power schemes
A particularly energy-intensive business, or horticultural sector, may be eligible to pay a reduced rate. This would require an agreement to be made with the Environment Agency by entering into a climate change agreement (CCA). A heavy energy usage businesses may receive up to 90% reduction on charges for electricity and a 65% reduction for gas, liquefied petroleum gas (LPG), coal and other solid fuels.
You can check out the government website guide: https://www.gov.uk/green-taxes-and-reliefs