The Climate Change Levy – What is it?
The Climate Change Levy (CCL) is designed to encourage businesses to reduce their energy consumption or to switch to renewable sources in order to benefit the environment. The tax is on commercial energy usage; however, businesses with low energy consumption are exempt from paying this levy and are classed as ‘domestic consumers’ – this is calculated by using what is referred to as “de-minimis” values. There are also other circumstances where some types of business are also excluded from paying this levy. There is also the possibility of historical recovery of all or part of your CCL payments for the past 4 years; if you qualify.
“What are ‘taxable commodities’?”
The taxable sources your business may use include electricity, natural gas, hydrocarbon gas (in a liquid state), petroleum, coal, lignite and coke, all of which the government wants to conserve the use of.
“To assess the impact of CCL and how to reduce it, speak to us”
If you want to reduce or stop paying the levy, you need to start looking at using less of these taxable commodities. This could be by installing measures to make your site more efficient and the easiest areas to do this are lighting and heating; or by generating your own energy via renewables, such as solar and wind. You should work with a reputable intermediary, who can accurately review your requirements and assist you by recommending the right balance of traditional and renewable energy to meet your budget, showing you how your business can reduce energy consumption – UK Energy Management can deliver all of this for your business. In the 2016 budget, the government announced changes to the main rates of the Climate Change Levy, in April 2017 the first changes came into place, followed by an increase in April 2018 and there is another increase of 65% due from 1st April 2019. Now is the time to act.
“Now is the time to act”
What is the Renewables Obligation?
The Renewables Obligation (RO) is a government mechanism designed to help support the move to large scale renewable electricity generation. It does this by placing an obligation on all licensed suppliers of electricity to source a portion of the electricity from renewable sources. Renewable obligation certificates are issued to operators of accredited renewable generating stations for eligible energy they have generated through renewable sources. Those with insufficient certificates pay money into a buy-out fund which is in turn distributed to those who do have the certificates. It therefore acts as a clear motivator to produce renewable energy, making it more affordable and ensuring greater supply to the consumers. This is passed on to commercial energy users by energy companies that do not fully source their energy from green generation.
What do I need to do?
The landscape in the energy industry is ever changing and tax and regulation is one of many factors to be considered. At UK Energy Management, you can benefit from our knowledge and experience within the energy sector, our team of professionals will guide you through all the options available to you. Your next step is to contact us and start a conversation.
Contact us on 020 3893 8108 or firstname.lastname@example.org today.