Environmental tax is quickly becoming the norm as the world begins to adapt to climate change. One of these taxes is the Climate Change Levy. But what exactly is it and how will it impact your business today?

Below you will find a guide to everything you need to know about the climate change levy and how you can make changes to avoid paying CCL.

What is the Climate Change Levy (CCL)?

The Climate Change Levy, CCL for short, is essentially a tax that businesses will have to pay based on how much energy they use. The goal of the Climate Change Levy is to encourage businesses to reduce greenhouse gas emissions by improving their energy efficiency.

If you are a domestic energy user, you won't need to worry about paying a Climate Change Levy as you are exempt.

How does the Climate Change Levy work?

It works similar to other taxes, in which you will be required to pay a certain amount depending on how much energy you use. This includes your business electricity usage, your gas usage and how much solid fuel your business also uses.

The current limits before you need to pay are:

  • If you use less than 33kWh electricity a day
  • And/or if you use less than 145kWh gas a day

You will receive a 13 digit CCL reference number that you can use on the government website to pay off any outstanding CCL charges. Alongside the CCL charge, you can also pay any carbon price support rates using the same online tool.

Even if you are under the usage limits, you should still let HMRC know to avoid any unwanted charges and to prevent your company from getting into trouble!

How could the Climate Change Levy impact my business?

If your business regularly uses large amounts of gas and electricity, then the CCL can quickly begin to add up. No company wants to include large amounts of avoidable tax in their annual budget, and the climate change levy can really start to add up.

By switching to renewable sources and making energy-efficient changes to your business, you can save on more than just your energy bill. Unlike some other environmental taxes, CCL is completely avoidable, if you are willing to put in the effort to become more energy efficient. Ready to make the jump? Visit our site today for a free quote.

How to make your business more energy efficient

Get a smart meter

Quickly becoming one of the most popular ways a business energy supplier can help you lower your energy usage. Smart meters will offer you a fantastic way to keep track of your energy use and may even help you find ways to reduce energy wastage.

If you are unsure of how much energy you are using and you want to try and avoid being charged the climate change levy, then consider installing a smart meter on your premises. Not only will you lower your electricity bills, but you can also reduce carbon dioxide emissions!

Opt for LED lights

An incredibly effective way to lower your energy usage is to switch your lighting system to use LED lights. Designed around energy efficiency, LED lights to use far less electricity than their traditional counterparts - Which can really improve your companies average energy consumption.

Another great advantage to LED lights is that they tend to be far brighter than traditional bulbs. If you are looking for quick and reasonably cheap ways to improve your business energy efficiency, then you should consider switching to LED lights.

Turn off equipment when not in use

Although a lot of modern gadgets and business equipment will have built-in energy-saving features, it's still recommended that you turn off equipment when it's not in use. Energy use can quickly add up due to the equipment being left on.

Surprisingly, leaving unused equipment on is one of the most common ways a companies energy usage is higher than it should be. Devices like printers and even your businesses PCs can quickly hike up your business energy usage.

So whether you operate a start-up or you handle multiple energy-intensive businesses, you may be surprised at how much you can save by switching equipment off.

Turn down the thermostat

As tempting as it can be to crank your thermostat up, sometimes it just isn't needed. If you know you won't be working from your business premises for a couple of days then consider turning down the thermostat.

This is especially recommended during summer where heating is rarely needed. You will see an incredible drop in your energy bills by simply turning down your thermostats, so be sure to keep this is in mind.

Get a business energy quote today with Business Energy UK

Saving money on your energy bill as well as lowering your overall usage is incredibly important. Thankfully, here at Business Energy UK, we are here to help you find a business energy quote that works for you.

So whether you are looking for a reliable renewable source, or just want to cut down your costs, get in touch with us today.

Final thoughts

As frustrating as added tax can be, the Climate Change Levy is one of the easiest to avoid charges your company may face. By working alongside your energy supplier, you can quickly lower your energy usage and save yourself from high CCL charges.

So whether you switch out to LED lights or you ask your energy suppliers to install smart meters, be sure to keep our tips in mind to help improve your energy efficiency.

Frequently Asked Questions

Climate Change Levy rates will change depending on your energy usage. As of April 2021, the current set rate for the Climate Change Levy is 0.465p per kWh for gas charges and 0.775p per kWh for your electricity usage.

This may not seem like a large sum, but it can quickly add up. Make sure you are making an energy-efficient decision where possible to avoid high charges.

There are a few types of company and user that are entitled to the Climate Change Levy exemption. The most common types of user that are exempt are:

  • Charity-based businesses
  • Domestic users
  • Clients that have a Climate Change Agreement
  • Companies in the mineralogical and metallurgical sector
  • De-minimus consumers

Always double-check that your company is exempt as you may be paying a climate change levy when you are exempt. Even if you are exempt, it is recommended that you still contact HMRC to avoid any unnecessary charges.

If your business uses over a certain amount of gas or electricity, then you will have to pay Climate Change Levy. The current limits before you begin to be charged CCL is if your business uses less than 145kWh of gas or less than 33kWh of electricity in a day.

There are two main ways you can get a discount on any climate change levy charges. The first one is to consider investing in a climate change agreement. You can also take part in a climate change discount scheme which can drastically decrease your CCL charge.

If you manage to meet your climate change agreements you can expect discounts of up to 90% on your electricity charge and up to 82% on your gas charges. Which can really begin to add up.