TheClimate Change Levy (CCL) is a tax on energy delivered to non-domestic users in the United Kingdom.
Introduced on 1 April 2001 under theFinance Act 2000, it was forecast to cut annual emissions by 2.5 million tonnes by 2010, and forms part of the UK'sClimate Change Programme.[citation needed] The levy applies to most energy users, with the notable exceptions of those in the domestic and transport sectors.[citation needed] Electricity from nuclear is taxed even though it causes no direct carbon emissions.[citation needed] Originally electricity generated from newrenewables and approvedcogeneration schemes was not taxed, butthe July 2015 Budget removed this exemption from 1 August 2015, raising £450m/year.[1]
From when it was introduced, the levy was frozen at 0.43p/kWh on electricity, 0.15p/kWh on coal and 0.15p/kWh ongas.[citation needed]
A reduction of up to 90% from the levy may be gained by energy-intensive users provided they sign aClimate Change Agreement.[2]
Revenue from the levy was offset by a 0.3% employers' rate reduction inNational Insurance. However, theFinance Act 2002 subsequently increased that rate by 1%, reversing the reduction. The revenue used to fund a number ofenergy efficiency initiatives such as TheCarbon Trust. However, revenue recycling was removed at the Spending Review 2010, with the revenue going to the Exchequer.[3]
In the 2006 budget it was announced that the levy would in future rise annually in line with inflation, starting from 1 April 2007.[4] In the 2018 Budget, it was announced that the rates of the Climate Change Levy would be adjusted until 2022 so that the gas rate reaches 60% of the electricity rate in 2021 to 2022.[5]
Rates have changed as tabulated below.
| Fuel type | Rate |
|---|---|
| Electricity | 0.541 p/kWh |
| Gas | 0.188 p/kWh |
| LPG | 1.21 p/kg |
| Any other "taxable commodity" | 1.429 p/kg |
| Fuel type | Rate |
|---|---|
| Electricity | 0.847 p/kWh |
| Gas | 0.339 p/kWh |
| LPG | 2.175 p/kg |
| Any other "taxable commodity" | 2.653 p/kg |
| Fuel type | Rate |
|---|---|
| Electricity | 0.811 p/kWh |
| Gas | 0.406 p/kWh |
| LPG | 2.175 p/kg |
| Any other "taxable commodity" | 3.174 p/kg |
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