Finance Bill Tracking Service 2007 | Budget 2007 | Budget Notes

BN68 Climate Change Levy: changes to rates

Who is likely to be affected?

1   Suppliers and others liable to account for climate change levy.

General description of the measure

2   Legislation in Finance Bill 2007 will increase the rates of climate change levy for 2008-09 broadly in line with inflation.

3   The rates from 1 April 2007, which were increased broadly in line with inflation by legislation in Finance Act 2006, will be:

Taxable commodity Rate
Electricity 0.00441 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility 0.00154 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state 0.00985 per kilogram
Any other taxable commodity 0.01201 per kilogram

4   The rates from 1 April 2008 will be:

Taxable commodity Rate
Electricity £0.00456 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility £0.00159 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state £0.01018
Any other taxable commodity £0.01242

Operative date

5   The new rates shown in paragraphs 3 and 4 above will apply to supplies of taxable commodities treated as taking place on or after 1 April 2007 and on or after 1 April 2008 respectively.

Current law and proposed revisions

6   Paragraph 42(1) of Schedule 6 to the Finance Act 2000 contains the rates of climate change levy. Finance Act 2006 amended the paragraph to reflect the new rates from 1 April 2007. The paragraph will be amended again to reflect the rates that will be effective from 1 April 2008.

Further advice

7   HM Revenue and Customs wrote to all energy suppliers in October 2006 and again in March 2007 detailing methods to apportion climate change levy charges to those customers who do not coincide exactly with the start date of the new rates, as per paragraph 37(5) of Schedule 6 to the Finance Act 2000. Details of this methodology are outlined in paragraphs 7.17 to 7.22 of HMRC Notice CCL1, 'A general guide to Climate Change Levy' available at www.hmrc.gov.uk (click on the 'Environmental taxes' section of 'Excise and other').

8   If you have any questions about this change, please contact the National Advice Service on 0845 010 900. Information about Budget measures is available on the HM Revenue and Customs website at www.hmrc.gov.uk