Energy tax landscape to be simplified for businesses

The UK Government has said that they will be streamlining the energy tax landscape for businesses, which will include simplifying policy and regulation. When the Conservative Government was elected in 2015 they believed that the business energy tax landscape had become over complicated and had became a burden for businesses. Energy efficiency policy was also criticised with a number of schemes being very similar, using up a lot of administrative time within businesses.

As part of the changes the Government said they will be stopping the Carbon Reduction Commitment (CRC) from 2019. The CRC is currently mandatory for businesses who use more than 6,000MWh per year on electricity and that have one or more half hourly electricity meters. The money the government had from this will instead be gathered from an increase in the Climate Change Levy (CCL) from 2019 onwards.

The CCL is currently taxed significantly more on electricity than on gas, however the government want to even this gap out. It is believed that this will encourage businesses to reduce their gas consumption.

The way businesses report their energy will also be changed, as the reports on the current framework often overlap each other, wasting businesses time. The Government want to introduce a new streamlined reporting system for businesses which will save time and money.

These changes have been welcomed by businesses with the Confederation of British Industry saying the reforms were a ‘positive step’. They also said the reforms would allow companies to pay all of their energy taxes through their bill, which would ease the administrative burden.