From next month, there is an increase in the CCL charged on business gas and electricity bills. Quite a hefty increase too…
What is Climate Change Levy?
Climate Change Levy (CCL) is found on the bottom of most business energy bills, just before VAT is added.
CCL is a government environmental tax, and is charged per kWh of electricity or gas used on each bill. The majority of non-domestic bills will be charged CCL, with the exception of:
1 Any business or organisation that uses less than the de-minimis value on average, per month
This is 1,000 kWh per month for electricity and 4,390 kWh per month for gas. Bills for energy use below this threshold will not be charged CCL, and only 5% VAT. Some businesses that are on the borderline of the de-minimis value, may receive some bills with CCL and some without, depending how much gas or electricity wasted in that billing period.
2. Charities and Churches whose energy use is predominantly for charitable activities, over business activities
There can be confusion over what constitutes a business activity. As far as HMRC are concerned, it is any activity that is charged for. This can include the hiring of rooms, even for a nominal fee. Call us for advice.
Cimate Change Levy increase
Climate Change Levy (CCL) rates can change every April. The new rates are 0.847p per kWh for electricity, and 0.339p per kWh for gas.
So the electricity charge is getting closer to a whole 1p per kWh. Quite a jump from 0.583p for the last 12 months.
And why the increase? CCL is now the only carbon tax on UK energy bills. This follows the removal of the Carbon Reduction Commitment Energy Efficiency scheme (CRC). Therefore CCL has been increased to compensate the loss in revenue.
For more information and clarity on CCL charges, please call and we will be happy to help.
Perfect Clarity are independent energy brokers and consultants. Our buying power means lower prices from UK gas and electricity companies to save your business money.