Climate Change Levy change from 1 April 2022
News – Thursday, March 31st, 2022
The Climate Change Levy (CCL) is an environmental tax imposed by the government on taxable commodities as a cost signal to reduce carbon emissions.
Businesses that pay the standard rate of VAT (20%) are charged CCL on their energy bills, although there are exceptions. Businesses that meet the minimal use requirements and are charged the reduced rate of VAT (5%) don’t pay CCL.
The main rate of CCL is applied to business in the following sectors:
- industrial
- agricultural
- public services
- commercial
The CCL rates change from 1st April 2022. This is due to the Government rebalancing the rates to reflect the lowering carbon impact of electricity in comparison to gas consumption. This means that gas CCL rates continue to increase. The aim is for electricity and gas charges to be at a 1:1 ratio by 2025.
From April 2022 businesses on the main rate will pay:
- £0.00775 per kilowatt hour (KWh) for electricty
- £0.00568 per KWh for gas
- £0.02175 per kilogram (kg) of liquefied petroleum gas (LPG)
- £0.04449 per kilogram (kg) for any other taxable commodity
Further information can be found on the UK Government website here.
Taxable commodity | Rate from 1 April 2021 | Rate from 1 April 2022 | Rate from 1 April 2023 |
---|---|---|---|
Electricity (£ per kilowatt hour (KWh)) | 0.00775 | 0.00775 | 0.00775 |
Natural gas (£ per KWh) | 0.00465 | 0.00568 | 0.00672 |
LPG (£ per kilogram (kg)) | 0.02175 | 0.02175 | 0.02175 |
Any other taxable commodity (£ per kg) | 0.03640 | 0.04449 | 0.05258 |