With growing concerns around the environment and pollution, the government are working to encourage businesses to be more eco-friendly through a number of environmental taxes, reliefs and schemes.
There are a number of taxes and schemes for different types and sizes of business. You can receive reliefs or be exempt from some taxes depending on your activities.
The Climate Change Levy is paid at either the main rates or carbon price support rates. You will have to pay the Climate Change Levy at the main rates if your business is in one of the following sectors:
· Public Services
Main rates are paid on:
· Solid fuels
When are you exempt from paying main rates under the Climate Change Levy?
· If your business uses small amounts of energy
· If you’re a domestic energy uses
· If you’re a charity engaged in non-commercial activities
Fuels that are exempt:
· Electricity, gas and solid fuel are usually exempt from the main rates of CCL if any of the following are present:
o They won’t be used in the UK
o They’re supplied to or from certain combined heat and power schemes registered under the CHP quality assurance programme
o The electricity was generated from renewable sources before 1st August 2015
o They’re used to produce electricity in a generating station which has capacity of 2MW or greater
o They’re used in certain forms of transport
Pay at a reduced rate
The amount of main rate of CCL you are required to pay can be reduced if you’re an energy intensive business that as entered into a climate change agreement with the Environmental Agency.
Energy intensive businesses can get a 90% reduction for electricity and 65% reduction for gas, liquefied petroleum gas, coal and other solid fuel.
Who pays Carbon Price Support rates?
CPS rates of CCL are designed to encourage industries to use low carbon technology for producing electricity.
You pay Carbon Price Support rates for:
· Coal and other solid fossil fuels
You must pay the CPS Rate of CCL if you’re the owner of electricity generating stations and operators of combined head and power stations.
CTC Energy Efficiency Scheme
The CRC Energy Efficiency Schemes cover large, non-energy-intensive organisations:
· Water Companies
· Local Authorities
· All Central Government Departments
The EU’s Emission Trading System applied to businesses from energy-intensive sectors. The system allows you to buy and sell greenhouse gas emission allowances to reduce your organisations environmental impact.
If your business is covered by the EU Emission Trading Scheme must meet targets by cutting business emissions and trading emission allowances.
You must open an EU registry account in order to trade allowances. Allowances are traded by:
· Trading directly with other businesses
· Buying or selling from intermediaries
· Using the service of a broker
· Joining an exchange that lists on carbon allowance products
· Bidding at UK government or other EU member state auctions
Capital allowances on energy-efficient items
You are able to claim capital allowances when you buy energy efficient, or low or zero-carbon technology for your business. This reduces the amount of tax you pay.
You must pay tax on top of your normal landfill fees if your business gets rid of waste using landfill sites.
You are exempt from paying Landfill Tax on:
· Dredging activities
· Quarrying and mining
· Pet cemeteries
· Inactive waste used for filling quarries
You are entitled to tax credits if you send waste from landfill to be recycled, incinerated or reused.
Contact us now for more business tax advice