The Climate Change Levy (General) Regulations 2001, No. 838 (as amended)

The Climate Change Levy (General) Regulations 2001 are part of the UK's efforts to reduce greenhouse gas emissions and promote energy efficiency. This legislation imposes a tax on energy delivered to non-domestic users, encouraging businesses to adopt more sustainable energy practices.

Purpose: The primary purpose of the Climate Change Levy (CCL) is to incentivize energy efficiency and reduce carbon emissions from industrial, commercial, agricultural, and public service sectors. By taxing energy usage, the CCL aims to encourage businesses to reduce their energy consumption and invest in energy-saving technologies.

Requirements:

1. Levy on Energy Supplies: The CCL applies to the supply of taxable commodities, including electricity, gas, and solid fuels, to non-domestic users. The levy is charged per unit of energy used, with specific rates for different types of energy.
2. Exemptions and Reductions: Certain energy supplies are exempt from the levy, such as energy used in domestic premises, supplies for charitable non-business use, and energy used in certain forms of transport. Additionally, businesses that have entered into Climate Change Agreements (CCAs) can receive significant reductions on the levy if they commit to meeting energy efficiency targets.
3. Registration and Reporting: Businesses liable for the CCL must register with HM Revenue and Customs (HMRC) and file periodic returns detailing their energy usage and levy payments. Accurate record-keeping and reporting are essential for compliance.
4. Taxable Commodities: The regulations specify which commodities are subject to the levy, including electricity, natural gas, coal, and liquefied petroleum gas (LPG). The rates are periodically reviewed and updated to reflect policy objectives.

Applicability: The Climate Change Levy applies to businesses and public sector organizations in the UK that consume energy. It affects a wide range of sectors, including manufacturing, retail, agriculture, and public services. Domestic energy users and energy-intensive industries that meet specific criteria may be exempt or eligible for reduced rates.

By imposing a financial cost on energy usage, the Climate Change Levy (General) Regulations 2001 aim to promote energy efficiency and reduce carbon emissions, contributing to the UK's broader climate change mitigation efforts.

The Climate Change Levy (General) Regulations 2001 set forth specific evidence requirements to ensure compliance with the levy, accurate reporting, and the proper administration of exemptions and reductions. These requirements help to maintain transparency and accountability in the implementation of the levy.

Key Evidence Requirements:

1. Registration with HMRC: Businesses liable for the Climate Change Levy (CCL) must register with HM Revenue and Customs (HMRC). This involves providing necessary details about the business and its energy usage.
2. Energy Consumption Records: Businesses must maintain accurate records of their energy consumption. This includes detailed documentation of the amount and type of energy used, such as electricity, natural gas, coal, and liquefied petroleum gas (LPG).
3. Periodic Returns: Businesses are required to file periodic returns with HMRC, typically on a quarterly basis, reporting their energy consumption and the corresponding levy payments. These returns must be accurate and supported by the underlying energy consumption records.
4. Invoices and Contracts: Businesses should retain invoices and contracts related to their energy supply. These documents serve as evidence of the energy purchased and consumed and are crucial for verifying the accuracy of levy payments and any applicable exemptions or reductions.
5. Climate Change Agreements (CCAs): Businesses that have entered into CCAs to receive levy reductions must maintain records demonstrating compliance with the energy efficiency targets set out in their agreements. This includes documentation of energy-saving measures implemented and regular progress reports.
6. Exemption Documentation: For businesses claiming exemptions (such as energy used for domestic purposes, in certain forms of transport, or by charities for non-business use), it is necessary to retain appropriate documentation to substantiate these claims. This might include usage logs, certificates, or other relevant records.
7. Audit Trails: To ensure compliance, businesses should maintain comprehensive audit trails of all records related to the CCL. This includes keeping records for a specified period, usually at least six years, to be available for inspection by HMRC if required.

These evidence requirements ensure that businesses accurately report their energy usage and levy payments, support claims for exemptions or reductions, and comply with the regulatory framework established by the Climate Change Levy (General) Regulations 2001. This helps to achieve the overall goal of promoting energy efficiency and reducing carbon emissions.