Business Energy Tax Roundup

Business owners the world over will know about the burdens of various forms of taxation. With more focus than ever on energy consumption and costs, more pressure is on businesses to become environmentally-friendly and make smarter energy decisions.

We’ve teamed up with business energy supplier, Opus Energy, to give you a summary of the points businesses should take into consideration (as of April 2016) when it comes to energy consumption costs – and how to reduce the rates of taxation you pay in the process!

Climate Change Levy

The Climate Change Levy is paid on electricity, gas and solid fuels like coal (check the main rates on your energy bill). The main rate is paid by most industrial, public service and commercial businesses, and is part of the government’s growing ambition to reduce our carbon footprint. There are a few ways you can reduce this, or be exempt from this altogether, which we detail below…

1.     Small organisations: Get a reduction on the Climate Change Levy with Carbon Price Support rates

Relief from the Climate Change Levy may be available to your business, in the form of Carbon Price Support. This has been introduced to encourage you to use low carbon technology for producing electricity.

Your business itself needs to be small and not use much energy, or you have to be a charity engaged in non-commercial work for you to be eligible for this reduction.

If the nature of your business means that you use a lot of energy, it is worth investigating a Climate Change Agreement with the Environment Agency, which can make you eligible for a reduction too. You can get access to a 90 per cent reduction in electricity rates and a 65 per cent reduction for gas and other solid fuels.

Electricity, gas and solid fuel users can also get exemption from the main Climate Change Levy rates, if the fuels won’t be used in the UK, the electricity was generated from renewable sources and for a number of other reasons, too.

2.     Large Organisations: Take part in the Carbon Reduction Commitment Energy Efficiency scheme

The Carbon Reduction Commitment Energy Efficiency scheme is eligible for large organisations which aren’t energy-intensive, such as hotels, banks, state schools and government departments. Companies can register, then monitor and report CO2 emissions. This is definitely worth doing if your business qualifies for the scheme.

3.     Working in energy supply or manufacture: Join the EU Emissions Trading System

If you’re working in manufacturing or energy trading, you may be able to take part in the EU Emissions Trading System. This is separate from the Carbon Reduction Commitment Energy Efficiency scheme, and lets you reduce your organisation’s environmental impact by allowing you to buy and sell allowances for greenhouse gas emission.

To be able to take part, you have targets you must meet. These include cutting your business emissions and also trading your emissions allowances. Emissions allowances can be traded directly with other businesses, with intermediaries such as banks and with several other exchanges.

4.     All businesses: Buy energy-efficient items and claim enhanced capital allowances

Reduce the amount of tax you pay if you choose energy-efficient items, or low and zero carbon technology. You’re reducing the cost to the planet and your business at the same time! Get enhanced capital allowances on low carbon emission cars, energy and water-saving equipment.

It’s time to take your business energy tax into consideration, as well as save your business some money and the environment from carbon emissions. Visit the Opus Energy website for further information.


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