Government proposes business energy tax reform

The government has set out its intention to create a single energy efficiency tax for businesses, simplifying the existing framework. A consultation, published on 28 September, proposed scrapping the existing Carbon Reduction Commitment (CRC) and Climate

The government has set out its intention to create a single energy efficiency tax for businesses, simplifying the existing framework.
A consultation, published on 28 September, proposed scrapping the existing Carbon Reduction Commitment (CRC) and Climate Change Levy (CCL), and creating a new single consumption tax based on the CCL.
Currently, organisations pay the main rates of the CCL if they are in the industrial, commercial, agricultural, or public service sectors. But the government believes that there is considerable cost-effective energy and carbon saving potential not being utilised, and that this could play a crucial role in encouraging productivity, while meeting energy security and climate change goals.
The government also plans to introduce a single reporting framework for energy efficiency taxes, as the current system is regarded as too complex and often results in overlapping responsibilities. The new framework would incorporate “the most effective elements from the range of reporting schemes and deliver a significant net reduction in compliance costs.”
The consultation will be open for responses until 9 November, and the government’s proposals for the way forward will be detailed in next year’s Budget.
 

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