The carbon price floor will come into effect on 1 April 2013. It
will be a tax on fossil fuels used in the generation of electricity.
This will be achieved through changes to the existing Climate Change
Levy (CCL) regime in the case of gas, solid fuels and liquefied
petroleum gas (LPG) used in electricity generation. These changes
include the setting up of new carbon price support (CPS) rates of
CCL.
Registering for CCL if you are liable to pay the
CPS rates of CCL
If you are a generator liable to pay the CPS rates of CCL you must
register with HM Revenue & Customs (HMRC). From 1 April 2013, you
must account for, declare and pay the CPS rates of CCL due to HMRC
using the existing CCL returns procedures.
If you are already registered for CCL, you don't need to
register again, but you will need to remember to account for the CPS
rates of CCL on your CCL returns from 1 April 2013.
If you are registered under the Combined Heat and Power Quality
Assurance (CHPQA) Programme, and you use gas, solid fuels or LPG to
generate electricity, you will need to register and pay the CPS rates
of CCL. The person liable to register will be the owner of the
generating station in the case of a non-combined heat and power (CHP)
generator or the operator in the case of a CHP generating
station.
If you are not already registered for CCL and you need to do so as
a result of the introduction of the carbon price floor, then you will
need to register with HMRC by 1 April 2013 using form CCL1. Guidance
on registering for Climate Change Levy is available below.
If you are an electricity generator using
oils
As oil is not subject to CCL, the carbon price floor for oils is
being achieved through reform of the fuel duty regimes, and in
particular changes to the relief on oil used in electricity
generation. From 1 April 2013, the amount of fuel duty that you can
reclaim on oil used in electricity generation will be adjusted to
establish new CPS rates of fuel duty on the following oils:
- fuel oil
- other heavy oil
- rebated light oil
- gas oil
- rebated bioblend
The CPS rates of fuel duty will apply in relation to any claim for
relief on oil used to generate electricity on or after 1 April 2013,
irrespective of when that oil was supplied to the generator.
Form EX55 is being amended to enable the CPS rates of fuel duty to
be accounted for, and you should continue to submit all claims for
relief to the Mineral Oils Relief Centre (MORC) on form EX55 in the
usual way. The amended EX55 will have three additional boxes where
you will be required to insert the quantity of fuel and the
appropriate CPS rate for the fuel used.
As current fuel duty rates are higher than the announced CPS rates
of fuel duty, the net effect should be a reduction in the amount of
relief you can claim.
Further details will follow in information being sent by HMRC to
generators using oils.
Further information
Consultation document of 2010 (www.hm-treasury.gov.uk/consult_carbon_price_support.htm)
Government response to consultation (PDF 494K) (www.hm-treasury.gov.uk/d/carbon_price_floor_consultation_govt_response.pdf)
TIIN - Budget 2011 (www.hmrc.gov.uk/budget2011/tiin6111.pdf)
TIIN - Draft Finance Bill legislation December 2011 (www.hmrc.gov.uk/tiin/tiin702.pdf)
TIIN - Budget 2012 (www.hmrc.gov.uk/budget2012/tiin-0701.pdf)
TIIN - Draft Finance Bill legislation December 2012 (www.hmrc.gov.uk/tiin/2012/tiin4013.pdf)
The following documents will be published at or around Budget
2013. They will be available from this page as soon as they are
published:
- a further TIIN
- a new public notice CCL 1/6