There are only three things certain in life: death, taxes and … stealth taxes. But if you run a hotel, B&B or holiday park you could be due a rebate
We can all agree that tax can be a challenging part of running a business effectively. But what if we told you that there’s a stealth tax hidden within your utility bills that you could be claiming relief from?
The Climate Change Levy is a government-imposed tax that most organisations simply pay without question. But what exactly is it and why should you be looking into an exemption?
Getting to grips with Climate Change Levy (CCL)
As part of the UK government’s efforts to cut carbon emissions and boost energy saving, the CCL was introduced back on 1st April 2001.
The energy tax (not carbon tax) is part of the wider Climate Change Programme — a scheme launched by the government at the turn of the millennium. This aims to deliver on targets set at the 1992 Earth Summit, where the United Nations gathered to discuss the threat that rapid warming posed to humanity and the Earth itself.
The CCL was designed to target businesses that were deemed to profit from their energy use. It is imposed on all energy delivered to non-domestic users in the UK.
CCL exemption was available on renewables until 2015
Until 1st August 2015, renewable energy could be deemed exempt from the Climate Change Levy. Energy was defined as electricity, gas, solid fuel and liquid petroleum gas. As such, energy generated from certain renewable sources and Combined Heat and Power (CHP) could be exempt from tax.
As of 2015, this is no longer the case and all sources of energy are liable for tax regardless of their renewability – a step that many felt to be at odds with the original intentions of the levy. But although renewable exemption is no longer available, there are still a number of businesses and industries that are still eligible for total CCL exemption.
Who’s still exempt?
Businesses that use less than 4,397kWh per month of gas and less than 1000kWh per month of electricity do not have to pay the CCL under current rules.
Importantly, businesses that are permanently or temporarily using energy for the supply of domestic or mixed-use purposes are also eligible for the CCL exemption. This includes:
- Hospices
- Homes for children, the elderly or the disabled
- Caravans
- Houseboats
- Armed forces accommodation
- School and university accommodation
- Self-catered holiday accommodation
- Houses, flats and other dwellings
- Supplies to community heating systems
- Religious communities like nunneries and monasteries
And there are even more criteria for exemption too, such as:
- Your gas and electricity supplies are charged at 5% VAT
- Your supplies are not used as fuel
- Your supplies are used in certain forms of transport
- You supply to Combined Heat and Power schemes
- Your supplies are used to produce other forms of energy
- Your organisation is part of a Climate Change Agreement through a trade body
How much will I save if I’m exempt?
The short answer to this question is: it depends on how much energy you use each month. You can use the table below to calculate how much you are currently paying and how these rates may change over the next 18 months.
BUT it’s important to note that you can not only claim exemption in the future; if your business has incorrectly been paying tax in the past you can claim a rebate from the government for up to the last 4 years.
Find the Climate Change Levy rates here.
How to apply for a CCL exemption
If you are entitled to a CCL exemption, you can complete a PP10 and a PP11 form, available from HMRC. However, for many organisations the process of claiming exemption and chasing rebates can be time consuming and confusing. At The Energy Check we offer expert help and advice to ensure that you receive the rebate you deserve without any wasted effort or hassle.
Want to know if you could be benefitting from a CCL exemption? Get in touch with us today on 0191 691 18 02 or email welcome@theenergycheck.co.uk. Remember, we don’t charge any upfront costs for this service. We work on a no win, no fee basis and simply charge a percentage of any money we claim on your behalf.