Businesses are reminded that Climate Change Levy (CCL) rates will increase from April 2019.
As part of the March 2016 Budget announcement it was revealed that the Carbon Reduction Commitment Energy Efficiency scheme (CRC) was to be abolished at the end of the 2018-19 compliance year. As a result, CCL would become the UK’s only carbon tax on energy bills.
From April 2019 the government will increase the CCL rate to compensate for the loss of CRC revenue.
CCL rates will increase for businesses between now and April 2019, with an overall increase of 50% for electricity and 72% for gas. The larger increase for gas is an attempt by the government to rebalance gas & electricity tax ratios as it is hoped by 2025 the ratio will be 1:1.
Future rates can be seen in the table below.
|From 1st April 2016||From 1st April 2017||From 1st April 2018||From 1st April 2019|
|Electricity (£ per kWh)||0.00559||0.00568 ↑2%||0.00583 ↑3%||0.00847 ↑45%|
|Gas (£ per kWh)||0.00195||0.00198 ↑2%||0.00203 ↑3%||0.00339 ↑67%|
Larger businesses who currently pay CRC could see a lower energy bill in April 2019 despite the rise in CCL. However, that will depend on when CRC allowances are purchased. If allowances are purchased at the start of April during the Forecast Sale (in the 2018-2019 compliance year) then a lower price will be secured, while purchases made during the Buy to Comply sale in June and July will be subject to a higher allowance price.
Businesses who do not pay CRC will be subject to higher energy bills, excluding; small energy users, charities who do not partake in commercial activities, businesses classed as domestic users or businesses which have a Climate Change Agreement (CCA) in place.
The only way to avoid this rise in energy prices is to reduce your business’ energy consumption, as CCL is charged in pence per unit (Kwh). Using Apollo’s client portal you can review your current energy data and identify potential savings. These savings can be achieved by changing behaviours, reducing usage during non-working hours or implementing energy saving technology.
Get in touch to find out more about how Apollo can help your business save money by calling us on 01257 239500 or by filling out the form on our contact page.