A new tax is designed to deter owners of energy supply businesses from removing assets on which the business’s survival depends, writes Colin Smith (PwC).
The problem?
2021 saw the insolvency of over 20 energy supply businesses i.e. businesses which sell gas and electricity to customers. When an energy supply business becomes insolvent its customers are generally transferred to another provider under the supplier of last resort (SoLR) scheme. Almost all of the 2021 insolvencies used the SoLR scheme. In exceptional circumstances the energy supply business enters a special administration regime (SAR); this happened to one supplier in November 2021. There is an indirect cost to the government and to all UK energy customers of the SoLR and SAR regimes.
The government has identified a risk that certain assets on which energy supply businesses rely – for example energy price hedges – could be held...
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A new tax is designed to deter owners of energy supply businesses from removing assets on which the business’s survival depends, writes Colin Smith (PwC).
The problem?
2021 saw the insolvency of over 20 energy supply businesses i.e. businesses which sell gas and electricity to customers. When an energy supply business becomes insolvent its customers are generally transferred to another provider under the supplier of last resort (SoLR) scheme. Almost all of the 2021 insolvencies used the SoLR scheme. In exceptional circumstances the energy supply business enters a special administration regime (SAR); this happened to one supplier in November 2021. There is an indirect cost to the government and to all UK energy customers of the SoLR and SAR regimes.
The government has identified a risk that certain assets on which energy supply businesses rely – for example energy price hedges – could be held...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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