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The UK Climate Change Levy is a tax on business
use of energy which commenced on1st April 2001. It is a levy on
the use of energy in the whole of the non-domestic sector in industry,
commerce, agriculture and the public sector. This means that every
industry within the UK now has the additional cost of the levy
on their energy bills.
The levy is being introduced to help the UK
meet its legally binding target of a 12.5% reduction in greenhouse
gas emissions and move towards the governments domestic goal of
a 20% reduction in carbon dioxide emissions by 2010. At the Kyoto
Protocol there was a global commitment to an 8% reduction in greenhouse
gas emissions by 2010. The reforms are intended to promote energy
efficiency, encourage employment opportunities and stimulate investment
in new technologies. The levy will entail no financial gain for
the public finances.
The levy will is calculated using the following
rates:@ 0.15p/kWh for coal and gas; 0.07p/kW for LPG; 0.43p/kWh
for electricity, (oil already subject to excise duty).
Exemptions and
Discounts
Electriciy from "new" renewable energy sources (i.e.
not large scale hydro-electric schemes) and "good quality"
CHP will be exempt from the levy. There will be an 80% discount
for energy intensive sectors that agree to energy or emissions
targets with DEFRA/The Carbon Trust.
Will the levy affect
the competitiveness of UK firms?
The government has taken into account Lord Marshall's recommendation
that the levy must be designed in a way that protects the competitiveness
of UK firms. Therefore, the government will fully recycle the
revenues from the levy back into industry. Businesses will benefit
from schemes promoting energy efficiency and stimulating tha take
up of renewable sources of energy. A cut in the rate of employers
NIC's of 0.3% has also been implemented.
Action Energy Loans
Action Energy is offering interest-free loans for energy efficient
equipment. Loans of between £5,000 and £50,000 are
available to small and medium sized businesses. Click below for
more information
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