The Climate Change Levy (CCL) and Business Energy

CCL applies to all businesses.

• For businesses that use less than (an average of) 33 kWh of electricity per day are exempt from paying CCL and will also pay VAT at the 5% rate.
• For businesses that use less than (an average of) 145 kWh of gas per day are exempt from paying CCL and will also pay VAT at the 5% rate.

In addition:

• If you purchase sufficient energy to cover your needs from renewable energy sources – such as wind, solar or geothermal – your usage will be exempt from CCL.
• Domestic customers and charity use is also exempt from the levy.
• If you’re an intensive energy user or a horticultural business you can potentially qualify for a partial exemption. Such businesses can be eligible for a 90% reduction for electricity and a 65% reduction for gas, LPG, coal and solid fuel.

To find out more about exemptions call the Department of Energy and Climate Change (DECC) on 0300 060 4000 or visit www.hmrc.gov.uk.

Firstly you should check that you fit one or more of the exemption criteria:

• Are you a charity?
• Do you use energy for domestic purposes?

If so, then the good news is one form will cover both your reduced rate VAT and your CCL exemption.

Download your VAT declaration form here.

This form can be used to declare your entitlement to both a reduced rate of VAT and exclusion from the Climate Change Levy at qualifying premises.

Once completed the VAT declaration should be signed and posted to your energy supplier.

Please note that if you have changed supplier since your last VAT declaration you will need to complete a fresh declaration in order to continue to receive reduced rate VAT and CCL exemption.

You will also be required to inform your business energy supplier in a prompt manner if there is any change in your circumstances that would affect your eligibility for this declaration.

If there is, then the good news is that you may still be able to claim an exemption but the VAT declaration form will be insufficient to achieve this.

Instead, HMRC provide a document called the PP11, this is the form that you need to use to inform your current business energy supplier of what level of CCL relief they need to apply against your liability for the Climate Change Levy.

The PP11 is otherwise known as the Climate Change Levy Suppler Certificate and can be found by following the link below:

http://www.hmrc.gov.uk/forms/pp11.pdf

Please note, your business energy supplier is legally obliged to receive this certificate before administering any CCL relief.

In addition, to support your business’ claim for relief you may need to complete the additional PP10 document, otherwise known as Climate Change Levy Relief Supporting Analysis. This is intended to prove, via supporting analysis, your claim for relief.

This can be downloaded by following the link below:

http://www.hmrc.gov.uk/forms/pp10.pdf

For more help and advice on this we advise you to visit www.hmrc.gov.uk or call the Excise Helpline on 0845 010 9000.