The Climate Change Levy (CCL) is set to increase on 1st April 2019, but why is this happening and how will it impact your business?
WHAT IS THE CLIMATE CHANGE LEVY?
The CCL is a government-imposed environmental tax on businesses electricity and gas use. Introduced in the UK in 2001. Its aim is to encourage businesses to become more energy efficient and reduce their CO2 emissions, while helping the UK meet its emissions targets and combat climate change. CCL rates are calculated per kWh of usage and are subject to change over time.
WHY IS IT INCREASING?
The government decided to scrap the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) at the end of its 2018/19 compliance year.
The CRC is a tax based on the amount of carbon each business uses, targeting larger businesses. In scrapping the CRC, they are increasing the rates for CCL to cover the loss of CRC revenue.
HOW MUCH IS IT INCREASING BY?
Electricity CCL charges will increase 45% from 0.00583 £/kWh to 0.00847 £/kWh.
Gas CCL charges will increase 67% from 0.00203 £/kWh to 0.00339 £/kWh.
HOW WILL THIS AFFECT MY BUSINESS?
The CCL affects most businesses who have an energy usage exceeding 1000 kWh per month for electricity and 4397 kWh per month for gas. Those below this threshold are exempt from the levy. Find out if your business is exempt from CCL charges.
This increase could mean businesses see a rise in their energy bills. The CCL is charged in £/kWh used and therefore volume dependent. To reduce this charge you would need to reduce your business energy consumption.