Energy Tax Exemptions in the UK are eco-friendly defined measures established by the government to lessen or remove the tax obligations related to specific kinds of energy utilisation or production.
These are often aimed at encouraging green energy or energy efficiency practices. They could involve renewable energy production, purchases of energy-efficient equipment, among others. These exemptions can be offered in various ways, such as tax credits, deductions, or straightforward tax exemptions.
Energy-intensive industries are sectors that consume large amounts of energy in their operations.
These include industries such as steel, aluminium, cement, glass, paper, and chemical production. High energy consumption often leads to substantial costs, making these industries particularly sensitive to energy prices and policies.
The aluminium industry is often considered one of the most energy-intensive industries.
The process of transforming bauxite into aluminium requires a significant amount of electrical energy, particularly for the electrolysis stage.
The Energy Intensive Industries (EII) tax relief in the UK is an eco-friendly government scheme to promote green energy and help energy-intensive industries stay competitive.
This scheme reduces the cost of electricity for these industries by providing exemptions or discounts from some energy taxes, like the Climate Change Levy (CCL) or renewable obligation charges, which are levies placed on firms due to their carbon emissions.
Whether or not you need to pay the Climate Change Levy (CCL) in the UK depends on your specific circumstances.
The CCL is a tax on energy delivered to non-domestic users in the United Kingdom. If your business is classified as a domestic or charity user, or if you use small amounts of energy, you may be exempt.
Businesses that are part of the Climate Change Agreement (CCA) scheme or that use renewable energy may also qualify for reductions or exemptions.
The Climate Change Levy (CCL) legislation in the UK is part of the Finance Act 2000.
It’s an environmental tax, charged on the energy used by businesses. The purpose is to incentivise energy efficiency and reduce greenhouse gas emissions and promote green energy. The rates vary based on the type of energy used – electricity, gas, or solid fuels, and there are specific rules for reliefs and exemptions.
A Climate Change Levy (CCL) exemption in the UK means that a business is not required to pay the CCL on their energy use.
Exemptions can apply to energy from renewable sources, certain types of industrial processes, or energy used by charities for non-commercial purposes. Also, businesses that have entered into a Climate Change Agreement (CCA) with the Environment Agency can get a discount on the CCL in return for meeting energy efficiency or carbon-saving targets.
This is a short meeting either by phone or in person, to confirm if you are eligible for one or more of the specific energy tax reliefs (Energy Intensive Industries (EII) or Climate Change Levy (CCL)).
This is to confirm our T&Cs, NDA, and Data Protection Compliance, and is a simple form signed electronically.
This is where you will sit down with a specialist tax analyst to determine which (if any) of the incentives your company qualifies for, and explain the administration process that Counting King will conduct on your behalf.
We request copies of certain financial documentation such as your accounts, energy bills, and any projected forecasts to calculate what benefit you will receive.
This is where we send everything to you for approval and make sure you are happy with the content included, which will be sent to the relevant government department.
This is where your claim and all of the supporting evidence we have produced is submitted to the relevant government department for processing.
Once the relevant government department has processed your claim you will receive certification that you are now eligible to commence your claims.
Find Out How Much You Can Claim With Our FREE Research and Development (R&D) Tax Credits Calculator. You can even get the calculation emailed to you for future use.
Energy Tax Exemptions are administered by HMRC! Here’s an overview of their eco-friendly process for claiming Energy Tax Exemptions:
Determine Eligibility: A company must first determine if they meet the eligibility criteria, typically involving a certain threshold of energy usage and energy intensity. This is usually calculated as a percentage of energy costs to the value of a company’s goods or services.
Application: Eligible companies need to apply to the Department for Business, Energy and Industrial Strategy (BEIS) with the necessary documentation proving their eligibility.
Verification: BEIS verifies the information and if approved, the company is added to a list of eligible businesses.
Inform Energy Supplier: The eligible company must then inform their energy supplier(s) that they are eligible for EII exemptions.
Exemption Process: The energy supplier applies the exemption to the company’s bills and claims back the cost from the Low Carbon Contracts Company (LCCC), which manages the CFD scheme.
Regular Reporting: Companies must regularly report to BEIS to confirm continued eligibility.
Maintain Records: Records must be kept for audit purposes.
Contact us today to find out if you are eligible for Energy Tax Exemptions