Climate Change Levy (CCL)

Climate Change Levy (CCL)
Climate Change Levy (CCL)

Here is a summary of forthcoming changes regarding the CRC energy efficiency scheme (CRC) and The Climate Change Levy (CCL), as the operational costs of all companies, including hospitality businesses, within the UK will be impacted.  In the 2015 summer budget, the government announced that it would review the business energy efficiency tax landscape in order to simplify it.

1. The CRC, which was only applicable to larger companies, will be abolished
The government has decided to close the CRC following the 2018-19 compliance year. The CRC is a mandatory carbon emissions reporting and pricing scheme that covers only large businesses in the UK that have high energy consumptions (more than 6,000MWh per year of electricity). Under this scheme, in each compliance year, an organisation registered for CRC would need to report on its energy consumption and also buy and surrender allowances equal to the CO2 emissions it generated.

2. The CCL, applicable to companies of all sizes, will see an increase in rates
In order to recover the revenue from abolishing the CRC, it has been announced that the main rates of  CCL will increase from April 2019. The CCL is a tax on energy delivered to all non-domestic users in the United Kingdom.

The rates for the CCL were published on 17th May 2016 as follows:

RATES Rate from April 2016 Rate from April 2017 Rate from April 2018 Rate from April 2019
Electricity (£ per kWh) 0.00559 0.00568 0.00583 0.00847
Natural gas (£ per kWh) 0.00195 0.00198 0.00203 0.00339


Here is an example of a company that has an energy expenditure of £100K per annum. Assuming equal consumption (kWh) and constant energy tariffs across years, the table below clearly highlights the impact that the CCL will have on total energy costs:

RATES Rate from April 2016 Rate from April 2017 Rate from April 2018 Rate from April 2019
Electricity charge (£) 70,000 70,000 70,000 70,000
Gas charge (£) 30,000 30,000 30,000 30,000
CCL Electricity (£) 5,346 5,432 5,575 8,100
CCL Gas (£) 2,555 2,594 2,659 4,441
Energy Forecast (£) 107,901 108,026 108,234 112,541


Contact  Leyla Basacik on +44 (0)203 643 5659 to find out more about how the CCL will affect your energy bills.

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