Seize “no-brainer” energy tax discount now

Energy intensive businesses could save £10,000s by claiming up to a 92% discount on their Climate Change Levy. But to qualify they must be fully signed up to the Climate Change Agreement scheme before 30 September.

Pressure to cut carbon emissions is increasing across all industries, and businesses have a time-limited opportunity to take advantage of this government incentive, according to independent power and energy consultancy, Roadnight Taylor. 

 “Businesses have been encouraged to use energy more efficiently through the Climate Change Levy (CCL),” explains senior consultant Richard Palmer. “However, they could take advantage of the Climate Change Agreement (CCA) scheme to significantly reduce the tax on their energy bills.”

The CCL is charged to industrial, public services, commercial and agricultural sectors on all taxable commodities for heating, lighting and power purposes. 

By signing up to the CCA, qualifying enterprises can reduce their CCL and magnify their discount by meeting attainable energy use targets by 2025. “The CCL can be reduced by 92% on electricity bills, and between 77% and 81% on other fuels,” says Mr Palmer. “This means many businesses could save £10,000s over the duration of the scheme.

 “It is worth noting that qualifying businesses need not have particularly high energy spend, with forward savings of nearly £10,000 available for clients with annual electricity spend as low as £45,000,” he adds. “As help is at hand to assess and arrange this for clients, signing up should be a no-brainer.”

The current CCA scheme started in April 2013 and was only due to run until 31 March 2023, but the Department for Business, Energy and Industrial Strategy is looking to extend the certification to 31 March 2025 – and to temporarily re-open the scheme to new applicants.  

 “This represents a unique opportunity for those not in a CCA agreement to benefit from tax reductions until 2025,” says Mr Palmer. “Furthermore, the CCL increased significantly from 1 April 2019, so this will offer significant savings for smaller energy users in this new application window.

Businesses will need to check the eligibility of their operations, and can book a tariff review to determine eligibility and scrutinise energy supply contracts, demand data and tariffs for a range of other bill-saving opportunities, says Mr Palmer.

 “It is essential that businesses assess the cost benefit of applying to the scheme and understand how the CCA could impact any planned investment in low carbon technologies during the scheme’s duration.”

Application is through a range of sector associations – so it’s important to choose the most appropriate one for your enterprise – with most likely to set a deadline for 30 August 2020.  

 “It’s therefore important to act now to take advantage of the discount as the savings could be considerable.” 

For more information call 01993 830571 or visit www.roadnighttaylor.co.uk

Or https://www.gov.uk/guidance/climate-change-agreements–2

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About The Author

John Swire - Deputy editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice.