Market leading insight for tax experts
View online issue

Climate change levy

printer Mail

The Climate Change Agreements (Administration) (Amendment and Related Provision) Regulations, SI 2016/1189, increase the terms of the buy-out fee that must be included in underlying climate change agreements for target periods 3 and 4 (1 January 2017 to 31 December 2018, and 1 January 2019 to 31 December 2020 respectively). For these periods, the buy-out fee will be calculated on the basis of £14 for each tonne of carbon dioxide equivalent by which a target is missed. The fee for target periods 1 and 2 remains at £12.

Climate change agreements allow energy intensive businesses to pay a reduced rate of climate change levy by undertaking to meet certain targets. Where a target is missed, the obligation under the agreement may instead be satisfied by the payment of a buy-out fee to the Environment Agency.