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Climate Change Levy (CCL)

Your guide to CCL and what it means for you.

What is the Climate Change Levy?

The Climate Change Levy (CCL) is a government-imposed environmental tax on commercial energy in the UK. It was introduced in the in April 2001 with the purpose of encouraging businesses to become more energy efficient and reduce their CO2 emissions whilst helping the UK to meet its emissions targets and combat climate change.

The amount of CCL your business pays depends on how much energy you use. CCL is charged only on units/kWh used, not on any other component of the bill, such as any fixed daily charges.

There are separate rates for both electricity and gas. As these are indexed-linked they are likely to increase on April 1st each year.

With the decision to abolish the Carbon Reduction Commitment (CRC) the Government put measures in place to offset the predicted loss in revenue. These measures included increasing the rates of CCL. This was bought into effect from April 1st, 2019.

If you’re a Yü customer, the CCL rate and charge will be displayed as separate items on your monthly electricity or gas invoice. Please be aware that you must register for the Climate Change Levy, if you fail to register or do not pay the Climate Change Levy, you will have to pay a penalty of £250 for each missed payment.

You can register for the CCL here: https://www.gov.uk/guidance/register-for-climate-change-levy

Climate Change Levy Rates:

Taxable Commodity Rates from 1st April 2020 Rates from 1st April 2021 Rates from 1st April 2022 Rates from 1st April 2023 Rates from 1st April 2024
Electricity (p/kWh) 0.811 0.775 0.775 0.775 0.775
Gas (p/KWh) 0.406 0.465 0.568 0.672 0.775

The CCL applies to businesses which fall under any of the following sectors:

  • Industrial
  • Commercial
  • Agricultural
  • Public Services

 

 

If you meet the following criteria, you are not required to pay the Climate Change Levy:

  • Your business uses very low amounts of energy – less than 33kWh electricity and/or 145kWh gas a day. Those below this threshold are exempt from the levy and are treated as domestic consumers.
  • You are a domestic energy user, i.e., your energy is used in homes, schools, caravans and self-catering accommodation
  • You are a charity involved in non-commercial activities

Yes, the Value added tax (VAT) is charged on CCL. The standard rate of VAT is applied to all CCL payments unless the supply is exempt or there’s a reduced rate of VAT in place.

You can find out more about  Value Added Tax in our VAT Information guide.

If you believe that you have overpaid on your climate change levy, you can claim a tax credit. Head over to the gov.uk website for more information: https://www.gov.uk/government/publications/climate-change-levy-tax-credit-claim-form-ccl200x

More information can be found on the government’s website: www.gov.uk

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