Climate Change Levy
The Levy applies to electricity, gas, solid fuel and liquefied gases used for lighting, heating and power in the business and public sectors.
The Levy was designed to be broadly revenue neutral in concept: at the time of introduction it formed part of a 'Levy Package' where the revenue collected is recycled back to business through a 0.3% reduction in National Insurance Contributions and also a system of enhanced capital allowances for investments in energy saving technologies.
Electricity produced from qualifying renewable sources and energy used and generated in approved combined heat and power schemes are no longer exempt from the levy.
There is also a reduced (20%) rate for energy-intensive businesses that enter into voluntary agreements to reduce their energy use and/or emissions.
The Climate Change Levy was amended on February 1st 2018. The new regulations alter the formula used to calculate relief entitlement and aligning the Levy to changes made in section 148 of the Finance Act 2016 and will be coming into force on April 1st, 2019.