CLIMATE CHANGE LEVY (CCL)
What is it?
Fuels that are covered by the hydrocarbon Oil Duties Act, and certain waste fuels are outside the scope of CCL
CCL does not apply to supplies of commodities for domestic or charitable use.
Establishing the rate of tax
Rates are calculated to reflect the carbon content of each taxable commodity and with a view on HM Government’s target price for carbon.
There are two rates; a main rate for downstream supplies to consumers, and a carbon price support (CPS) rate for fossil fuels used to generate electricity.
Reduced rates of CCL apply to commodities supplied to businesses that are party to a Climate Change Agreement (‘CCA’) with HM Government, under which they have signed up to meet specific reductions in energy consumption and emissions.
Critical and contentious points
Are reliefs and exemptions properly applied to downstream supplies and is adequate evidence held in support of this?
Is the obligation to apply the CPS rate of CCL identified and is the CCL arising properly applied?
Relief is available for certain energy-intensive sectors, and where energy commodities are used for their non-energy properties – has this been identified and claimed?
Landlords supplying energy to tenants may, potentially, access reliefs on their behalf.