News Blog

03 Aug 2015 | Filed under: Business, electricity

Mr Moffitt’s Profits Times: Issue Eighteen

Climate Change Levy exemptions removed

Previously, electricity from renewable sources had been exempt from the Climate Change Levy (the tax businesses pay on energy usage). From 1st August 2015 this ends. The move could see a 6% loss in income for onshore wind farms as they lose the Levy Exemption Certificates which provide vital financial support according to RenewableUK.

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The Climate Change Levy and your bills

IT SURPRISED SOME POLITICAL CORRESPONDENTS THAT RATHER THAN DISCUSSING THE LEVY CONTROL FRAMEWORK (LCF) WHICH LIMITS SUBSIDIES FOR LOW-CARBON SCHEMES, GEORGE OSBOURNE’S BUDGET ANNOUNCED TAX CHANGES.

Renewable energy generators will be hit as they lose income due to the Climate Change Levy but what does the budget mean for business?

Your energy bills will increase if you have a 100% renewable energy contract as CCL will likely be added for consumption from 1st August. Do check your bills as there is a strong likelihood that there will be incorrect electricity bills in September (for August consumption).

It is worth noting that if the 100% renewable electricity was generated before 1st august but used after that date, it is exempt from CCL for now. But I do not know how suppliers will be calculating this!

Charities exempt from CCL and 20% VAT for charitable purposes will be unaffected and of course if you don’t have a 100% renewable energy contract then you are also unaffected.

WHICH OTHER BILLS COULD BE AFFECTED?

If you run a fleet of cars a flat rate for emission generating cars from 2017 will see road tax increase for low-emission cars (although it will drop for high-emission cars). Zero emission cars will pay zero-tax.

Cars costing over £40,000 registered after 1st April 2007 will also pay a new premium car tax.

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