UK energy taxes set to change in April

2019-02-01T13:24:37+00:00February 2019|

This year sees several changes to energy taxes and regulations. Is your business ready?

From 1st April 2019, the Climate Change Levy (CCL) which is applied to business use of electricity, gas and solid fuel is increasing significantly.

CCL rates are set to rise by 67% on natural gas (from 0.203 pence per KWh to 0.339) and by 45% on electricity (from 0.583 pence per KWh to 0.847).

This is primarily to offset the loss in Government revenue as the CRC Energy Efficiency Scheme comes to an end.

The abolition of CRC coincides with the introduction of the Streamlined Energy and Carbon Reporting (SECR) regulations which will affect around 12,000 large businesses, according to business news website Bdaily. Under SECR, it will be mandatory for these companies to record carbon emissions, energy use and energy efficiency actions and report them in their annual reports.

As Bdaily explains, the financial impact of all these changes will depend on whether your business is a CRC participant, its overall energy usage, and whether the company is exempt from CCL or receives discounts.

Non-CRC participants (with no CCL exemptions or discounts), such as most small and medium sized firms, could see their electricity bills increase by approximately 2.5% from April 2019.

By contrast, existing CRC participants (with no CCL exemptions or discounts) could be better off as they’ll no longer need to purchase CRC allowances. Bdaily calculates that these organisations could see a 2.5% decrease in their electricity bills – although initially they will need to budget for overlapping charges of final CRC payments and new increased CCL rates.

Energy users that may be exempt from CCL include firms that use small amounts of energy and charities, while a reduced rate is available to energy-intensive businesses that enter into a climate change agreement (CCA) with the Environment Agency.

And, of course, all organisations can reduce their CCL costs by increasing their energy efficiency and using less energy.

Looking ahead, the CCL rates for 2020/21 have not yet been published but the Government has said it intends to increase CCL on gas and reduce the rate on electricity from 2020.

If you’re looking to cut your energy overheads in 2019, why not take the first step by exploring Zestec’s energy solutions for businesses? Contact the team today on 01202 862760 or email info@zestecgroup.co.uk.