CCL ― Carbon Price Floor

By Tolley

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

  • CCL ― Carbon Price Floor
  • What is Carbon Price Floor (CPF)
  • Liable for CPS rates of CCL
  • Exemptions
  • Tax points
  • Taxing fuels used in electricity generation
  • Accounting for CPS rates of CCL

Notice CCL1/6: Guide to the Carbon Price Floor  ; FA 2000, Sch 6 (as amended by FA 2013); The Climate Change Levy (General) Regulations 2001, SI 2001/838; The Climate Change Levy (General) (Amendment No 2) Regulations 2013, SI 2013/1716 (subscription sensitive)
What is Carbon Price Floor (CPF)

This measure was introduced with effect from 1 April 2013 and it affects the price of carbon produced by the UK electricity market by taxing the fossil fuels that are used to generate electricity within the UK. The tax due under CPF for oils and bioblends that are used to generate electricity are not covered below. More information can be found in Notice 175 Motor & heating fuels: relief from excise duty on oils used to generate electricity .

This note should be read in conjunction with the following guidance notes:

  • CCL ― glossary
  • Climate Change Levy (CCL) ― main rates
  • CCL ― penalties and interest
  • CCL ― accounting and record keeping requirements
  • CCL ― combined heat and power (CHP)
Supplies liable to CPS rates of CCL

The following taxable commodities are liable to the Carbon Price Support (CPS) rates of CCL:

  • any gas in a gaseous state that is of a kind supplied by a gas utility
  • any petroleum gas, or other gaseous hydrocarbon, in a liquid state
  • coal and other solid fossil fuels (petroleum coke, lignite, coke and semi-coke of coal or lignite)

Electricity is not a CPS commodity and will not be treated as a deemed supply if it is used to generate electricity. The CPS rates of CCL do not apply

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