Energy Efficiency Tax Consultation (UK)

Following the announcement of a review of the business energy efficiency tax landscape at the Summer Budget, HM Treasury is consulting (28th September to 9th November) to seek evidence and set out policy proposals to simplify and improve the effectiveness of the energy tax framework.

The review considers business energy policies and regulations, including the Climate Change Levy (CCL), the Carbon Reduction Commitment Energy Efficiency Scheme (CRC), taxes on other fuels – e.g. heating oils, Climate Change Agreements (CCA), mandatory greenhouse gas (GHG) reporting, the Energy Saving Opportunity Scheme (ESOS), Enhanced Capital Allowances (ECAs), and the Electricity Demand Reduction (EDR) pilot.

A first question asks if you agree with the principle of moving away from the current system of overlapping policies towards a system where a single business/organisation faces one tax and one reporting scheme – the consultation asks for the respondent to provide evidence on the level and types of benefits of an approach like this.

The government’s approach is for there to be a single reporting framework.

The consultation asks if you agree mandatory reporting should remain as an important element of the landscape in driving the uptake of low carbon and energy efficiency measures? If not, why not?

Should such reports require board level sign off and should report data be made publicly available? the consultation asks for reasons.

The consultation also asks if governments should develop a single reporting scheme requiring all ESOS participants (and potentially the public sector) to report regularly at board level. If so, what data should be included in such reports.

There is a question about whether such streamlined reports should be required of other larger companies (as defined in the Companies Act) that are not publicly listed.

The proposal is to move towards a single tax by abolishing the CRC and moving the revenue raising element into a single business energy consumption tax based on the CCL. The consultation indicates the government is open to views as to the balance of tax costs across fuels, where proposals can better deliver carbon reduction potential. A series of questions is asked in this area.

A series of questions is asked about the effectiveness of the CCA scheme.

The full consultation is found here.

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