Climate Change Levy PP10 PP11
Introduction
Climate Change Levy is a Government tax on energy for business customers. The tax is levied on all business users of energy, including the public sector, at the point of final consumption. The tax is aimed at reducing energy use to help the UK meet its commitments to reduce greenhouse gas emissions under the Climate Change Convention.
The Government signed up to reducing UK emissions by 10% on 1990 levels by 2010 at the Kyoto convention. The money collected by the Treasury will be recycled to businesses by a reduction in National Insurance Contributions (NICs) of 0.3%. This reduction also started in April 2001.
Who has to pay?
You do unless...
You are energy intensive - The Government has agreed that it will offer discounts of 80% to energy intensive sectors, defined as those covered by the Integrated Pollution and Prevention Control Directive (IPPC). These discounts will be given in return for signing legally binding agreements to reduce energy use in those sectors. These sectors are currently negotiating their targets, through their trade associations, with the Department for Transport and the Regions (DETR).
You are a horticultural producer - A 50% discount will be available to horticultural producers who are using energy supplies for heating buildings to grow produce or sterilise earth for growing. The Finance Bill 2000 defines the "horticultural produce" eligible for the discount.
At home and for charity - All domestic customers, including those in residential accommodation such as student halls, and energy supplies to registered charities are also exempt.
You use CHP and Renewable supplies - Exemptions will also be given for "good quality" combined heat and power (CHP) and renewable generation. DETR are defining "good quality" and all renewables except large-scale hydro generation, will be covered.
You have non-energy use of fuel - There will also be exemptions for some processes that use energy, but not as fuel.
If you think you are eligible for a discount you will need to let your energy suppliers know so they can collect the right amount of tax from you.
How Much Do I Pay?
For gas the charges are:-
01/04/2001 - 31/03/2007 0.15p/kWh
01/04/2007 - 31/03/2008 0.154p/kWh
01/04/2008 - to date 0.159p/kWh
What about VAT?
VAT will be levied on top of the Climate Change levy.
How Will We Help?
It is our responsibility, as your supplier, to ensure our customers are correctly billed for the levy they owe, and we will then pass the levy proceeds to the Customs & Excise Department. Corona Energy will make sure you know from your bill what you have consumed and thus are being charged the right levy amount.
Corona Energy is aware that some of our customers are thinking of investing in small scale CHP plants to help lower their energy bills and we will of course be delighted to talk to you about supplying the gas for your CHP plant. In trying to lower your energy costs you may also be considering some fuel switching again Corona Energy staff would be happy to discuss how we can help you meet your own business goals.
Corona Energy will also keep you updated on energy tax developments. While the levy rates may change, there is also the possibility of an EU wide energy tax in the longer term. Those with interruptible gas supplies may also be taxed on their back-up fuel and, as relative fuel prices change, you may wish to look at taking firm gas supplies, and Corona Energy could help you make the switch.
Our customers will need the Climate Change Levy documents PP10 and PP11.
Further Information
You can find out more on this subject by contacting your local Customs & Excise office, or visit the government web site www.hmcr.gov.uk
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