CCL Explained

What is Climate Change Levy?

The CCL came into force in April 2001 and is a government imposed tax, which all energy suppliers have the responsibility of collecting from their customers.

Who will pay & what will it cost?

All UK businesses and Public Sector Organisations (with some exceptions) will pay the levy, via their energy bills. Small businesses on domestic tariffs will not pay CCL. Rates of levy are as follows:

Prices from 1st April 2008

Fuel Oils are exempt from levy because they are already subject to excise duty. The Government intends to redistribute the tax collected via a 0.3% reduction in employers NI Contributions together with an allocation of £150 million for support to energy efficiency and renewable energy.

Exemptions

• New forms of renewable energy except large hydro electricity plants or nuclear power stations
• "Good Quality" combined heat and power plants under the CHPQA programme
• Energy products that act as both fuel and feedstock, within the same process (electrolytic processes)
• Public Transport Services that are 0% VAT registered
• Charities
• Natural Gas in Northern Ireland (for up to 5 years)
• Domestic users and 5% VAT registered users < 1000kWh per month
• The Horticulture Sector will be eligible for a discount of 50% in the rate of levy for up to 5 years

Certain energy intensive users, in particular Cement, Chemical, Ceramics, Food & Drink, Aluminium, Paper, Foundries, Non-Ferrous Metals and Steel are entitled to 80% discount from CCL providing they sign up to energy saving targets agreed between the government and relevant trade associations.