OTHER INDIRECT TAXES
VAT & Other Indirect Taxes
Environmental taxes encourage your business to operate in a more environmentally friendly way.
There are taxes and schemes for different types and sizes of business.
You may get reliefs or be exempt from some taxes, for example if:
Climate Change Levy (CCL) is paid at either the:
You pay CCL at the main rate on:
You pay the main rates of CCL if your business is in one of the following sectors:
You don’t pay the main rate of CCL on certain supplies, for example if you’re a:
Electricity, gas and solid fuel are normally exempt from the main rates of CCL if any of the following apply:
There are other exemptions and reliefs.
You can get a reduction on the main rates of CCL if you’re an energy intensive business and have entered into a
climate change agreement (CCA) with the Environment Agency.
Energy intensive businesses can get a 90% reduction for electricity and a 65% reduction for gas, liquefied petroleum gas (LPG), coal and other solid fuel.
Check if your business is eligible. Your industry trade association can also give advice.
The CPS rates of CCL encourage industry to use low carbon technology for producing electricity.
You pay CPS rates for:
The CPS rates of CCL are paid by owners of electricity generating stations and operators of combined heat and power (CHP) stations.
Certain suppliers don’t have to pay CPS rates. These include small generators, stand-by generators and generating stations in Northern Ireland.
The CRC Energy Efficiency Scheme (formerly known as the ‘Carbon Reduction Commitment’) covers large, non-energy-intensive organisations, for example:
You should already be registered if your business qualifies for the CRC Energy Efficiency Scheme. You must now:
The EU Emissions Trading System (EU ETS) affects businesses from energy-intensive sectors, such as the energy industry and certain manufacturers.
It lets you buy and sell greenhouse gas emission allowances to reduce your organisation’s environmental impact.
Large organisations not covered by the EU ETS are covered by another scheme called the CRC Energy Efficiency Scheme.
If your business is covered by the EU ETS you must meet targets by:
You’ll need to open an EU Registry account so you can trade allowances. You can then trade allowances by:
Work out your greenhouse gas emissions by multiplying the amount of energy you use by the emissions they produce.
You need to do this for each type of energy you use.
To do this, you need to know:
You can claim capital allowances when you buy energy efficient, or low or zero-carbon technology for your business. This reduces the amount of tax you pay.
Landfill Tax is a tax on the disposal of waste. It aims to encourage waste producers to produce less waste, recover more value from waste (for example through recycling or composting) and to use more environmentally friendly methods of waste disposal.
Landfill Tax applies to all waste:
The tax is charged by weight and there are two rates. Inert or inactive waste is subject to the lower rate.
You need to:
The tax is charged by weight. There are 2 rates. You pay the lower rate on ‘inactive waste’ – for example rocks or soil.
If your landfill site accepts waste fines, you may need to carry out a loss on ignition test to help determine the rate of tax to pay.
You don’t have to pay Landfill Tax on:
You can get tax credits if you send waste from landfill to be recycled, incinerated or reused.
This is a tax on sand, gravel and rock that’s either been:
You must register with HM Revenue and Customs (HMRC) if your business exploits aggregate in the UK, for example if you’re a quarry operator.
Every quarter, you must tell HMRC how much aggregate you’ve produced or sold.
You can get tax relief if you export aggregates or use them in some industrial or agricultural processes.
If you don’t use the material as aggregate it may be eligible for relief.
Certain materials are excluded from the tax, for example soil, vegetable or other organic matter.