Businesses are reminded the rates for Climate Change Levy (CCL) will increase from April 2019.
Energy costs are estimated to rise by 20% next year, with an increase of 52% for electricity and 74% for gas.
In the March 2016 Budget, the government announced it would scrap the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) at the end of the 2018/19 compliance year. As a result, CCL would be the UK’s only carbon tax on energy bills.
The government is therefore increasing the CCL rate – which is an environmental tax on energy delivered to non-domestic users – from April next year to recover the revenue from abolishing the CRC.
From 1st April 2016 From 1st April 2017 From 1st April 2018 From 1stApril 2019
Elec (£ p/kWh) – 0.00559 0.00568 ↑2% 0.00583 ↑3% 0.00847 ↑45%
Gas (£ p/kWh) 0.00195 0.00198 ↑2% 0.00203 ↑3% 0.00339 ↑67%
Larger businesses that currently pay CRC could however see lower energy bills in April 2019 despite the rise in CCL rates, however, that will depend on when the CRC allowances are purchased. If allowances are bought at the start of April during the Forecast Sale (in the 2018/19 compliance year), then a lower price can be secured.
The only way to avoid the increase in energy prices is to reduce your business’ energy consumption as CCL is charged in pen per unit (kWh). You can review your current energy data and identify potential savings, which can be achieved by changing behaviours, reducing usage during non-working hours or implementing energy saving technologies.
For more information and help on this, please contact us at [email protected].
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