Climate change levy (CCL) ― main rates

By Tolley
  • (Updated for Budget 2020)

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Climate change levy (CCL) ― main rates
  • What is CCL
  • Main rates
  • Reliefs available
  • International aspects
  • Time of supply

This guidance note provides a general overview of the main rates of climate change levy (CCL). This note should be read in conjunction with the following guidance notes:

•CCL ― glossary
•Registering for CCL
•CCL ― accounting and record keeping requirements
•CCL ― electricity produced from renewable sources
•CCL ― reliefs ― outside the scope and exempt supplies
•CCL ― reliefs ― reduced rates and certificates
•CCL ― penalties and interest
•CCL ― Carbon Price Floor
•CCL ― combined heat and power (CHP)

Notice CCL1 ; De Voil Indirect Tax Service V21.1; Finance Act 2000, Part II, s 30, Schs 6–7; Climate Change Levy (General) Regulations 2001; Finance Bill 2015

What is CCL

The climate change levy (CCL) is a tax on energy delivered business consumers in the United Kingdom, such as, industry, commerce and agriculture. When it was introduced, its aim was to provide anincentive to increase energy efficiency and to reduce carbon emissions.

CCL is applied to taxable supplies of specified energy products, called taxable commodities, that are used for fuels by business consumers. 

The main rates of CCL are not applied to taxable commodities that are supplied to domestic consumers and charities where the fuel is used for non-business purposes.

There is no registration threshold for CCL and if a business makes supplies of taxable commodities, including self-supplies, it is required to notify HMRC and register for CCL. More information on registering can be found in the Registering for CCL guidance note.

From a VAT perspective, VAT must be levied on the value of the supply including the amount of CCL levied on the consumer. However VAT is not due on self supplies that are liable to CCL.

Taxable commodities

There are four groups of taxable commodities:
•any gas in a gaseous state that is of a kind supplied by a gas utility
•any petroleum gas or other gaseous hydrocarbons in a liquid state
•coal and lignite, coke, semi-coke produced from coal / lignite and petroleum coke (hereafter referred to as ‘other taxable commodities’)

Taxable supplies

CCL will be applied to supplies

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