The mandatory tax on fossil fuels for all UK businesses was raised on the 1st
April 2008 by around 3%.
 The tax is still automatically collected by your supplier on behalf of the
government, unless you are exempt from the levy, in the case of charities and
those with green energy contracts.
From the 1st April 2001, the UK government started taxing all UK businesses
on every unit of fossil fuels they use. This includes gas, electricity, LPG
(Liquefied Petroleum Gas) and coal but does not include energy generated from
renewable sources.
Initially the tax added around 15% to business energy bills across the
country, with the money generated being used to promote energy efficiency and
low-carbon technologies in an effort to help the country reduce its greenhouse
gas emission in line with agreements set out in the 1997 Kyoto Summit.
The rate was initially frozen at 0.43p/kWh for electricity and 0.15p/kWh for
gas, but in the 2006 budget it was announced that the levy would increase
annually in line with inflation. Since then, the levy has been increased
twice in line with inflation of around 3% each time.
The current rates are 0.456p/kWh for electricity and 0.159p/kWh for gas. Information on the CCL
and how you may be eligible for exemption can be found on the
Climate Change Levy page.
For savings on your Business
Energy see our
Business
Electricity and
Business Gas pages.
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