Innovative Energy Consultancy Ltd
Innovative Energy Consultancy Ltd

Managing your business energy tax

While we appreciate that to most people business energy tax appears to be a rather dry subject, we’re always surprised at the number of companies which are not proactive in managing their charges.

It is likely your finance team manages your corporation tax affairs in fine detail, it’s common for energy tax to get less attention, even though it’s often a significant cost to a business.

There are two current energy tax schemes which affect businesses – the Carbon Reduction Commitment Scheme and the Climate Change Agreement Scheme. If you’re a manufacturer or a medium to large business it’s likely you’re affected by one of these schemes in that you pay additional tax or receive a tax rebate according to the amount of energy your organisation uses.

All too often we find that businesses are completing their CCA or CRC audit paperwork and submitting the required returns but are not being proactive in managing their energy consumption or reduction opportunities, both of which affect the amount of tax to be paid. The other common issue is a lack of awareness around the rebates which are available and the process which needs to be followed in order to claim the maximum rebate your organisation is entitled to.

We find that the companies which are most effective in managing their energy costs and taxation overall are those where the heads of finance and operations work closely together. Both have a role to play in managing energy costs. of course.

If you are not clear about the energy taxes which apply to your organisation, or you know you are paying energy tax but suspect you’re paying too much or not claiming the full rebate available, we can step in to provide the support required to ensure you comply, pay the correct amount and claim the rebate you’re entitled to. We work with public and private sector organisations to manage energy legislation compliance so can offer as much or as little support as required.


There are a number of legislative changes in the pipeline. The Government is currently analysing feedback on the consultation on Reforming the business energy efficiency tax landscape which ran from 29 September to 9 November 2015. This sought views and evidence on proposals to reform the business energy efficiency tax landscape and associated regulations, including the CRC Energy Efficiency Scheme and Climate Change Agreements, and energy and carbon reporting including links to the Energy Savings Opportunity Scheme (ESOS).

  • The government’s Carbon Reduction Commitment (CRC) scheme will be abolished at the end of 2018/19. As of 1st April 2019 the income received by Government from the CRC tax will be added on to the Climate Change Levy, so expect your costs to rise if you’re paying the CCL.
  • Climate Change Agreements will be retained until at least 2023 with existing eligibility criteria. To compensate for the April 2019 increase in the main rate of CCL, CCA discount rates will be raised from 90% to 93% for electricity and from 65% to 78% for gas from 1st April 2019.
  • It is therefore even more important to be in a Climate Change Agreement, if eligible, to avoid the pending increases in tax.

We will keep you up-to-date as these changes progress but if you have any queries, please do get in touch.

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