Measure
The government will legislate in the Spring Finance Bill 2023 to increase the main rates of Climate Change Levy (CCL) for gas and solid fuels. The gas rate will be aligned with that for electricity and the rate for solid fuels will increase proportionally to the gas rate increase. The CCL main rates on electricity and petroleum gases including liquefied petroleum gas (LPG) will continue to be frozen for 2024 to 2025.
The Spring Finance Bill 2023 will also adjust the reduced rates of CCL on gas and solid fuels for qualifying businesses in the Climate Change Agreement scheme. The reduced rates on electricity and petroleum gases will be frozen at 2023 to 2024 levels in 2024 to 2025.
A summary of the changes is as follows:
Businesses that are registered for CCL (both those that benefit from a Climate Change Agreements and those that do not) – particularly those that supply or self-consume taxable gas or solid fuel - and businesses that incur CCL as a cost as a result of their contractual arrangements.
The amended main and reduced rates take effect on 1 April 2024.
The announcement aligns with the government's long held ambition to harmonise the rates of CCL applicable to gas and electricity. The solid fuel rate increase is intended to ensure that harmonisation does not inadvertently result in suppliers and consumers being incentivised to use such products over gas. The increase in the reduced rate/CCL discount available to Climate Change Agreement holders is intended to ensure that the level of tax relief available to such businesses is maintained.