CLIMATE CHANGE LEVY
Facts
Concern for the environment has been with us for a number of
years and early discussions referred to global warming and the greenhouse
effect. Today, it is referred to as
Climate Change. Scientific opinion
generally accepts that rising levels of greenhouse gas concentrations in the
atmosphere will cause significant changes to global patterns. In response to the scientific evidence and to
pressure from environmental campaigners, climate change has moved from being a
political issue to a business issue as Governments are increasingly
implementing legislation that promotes positive environmental behaviour and
penalises offenders.
Under the Kyoto protocol, developed countries have agreed
that by 2008 to 2012, they will target reductions in CO2 emissions by an
average of 5.2% below 1990 levels. The
UK’s target under this agreement is to achieve a 12.5% reduction in CO2 emissions by
2010. The Climate Change Levy (CCL) is a
key part of the Government’s climate change programme and a principal funding
mechanism for the Carbon Trust, the government-backed company established to
take the lead on moving to a low carbon economy.
Costs
The Climate Change Levy (CCL) is a tax on an energy use in
industry, commerce, agriculture and the public sector. It was introduced in April 2001. The tax will
vary in its effect as some organisations are eligible for discount and some
energy sources or users of energy are exempt. All UK businesses and public sector organisations pay the levy via their
energy bills. The full rate of levy is:
- 0.43 p/k W h
for electricity
- 0.15 p/k W h
for gas
- 1.17
p/kilogram for coal
- 0.96
p/kilogram for LPG
- Fuel oils
do not attract the levy as they are already subject to excise duty
The CCL is currently accompanied by a 0.3% reduction in
employers National Insurance contributions.
Why Change?...
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