Environmental/Government Grants

From April 2001, UK businesses became liable for the Climate Change Levy (CCL), a new energy tax that adds about 15% to typical energy bills. Many intensive users of energy are able to join Climate Change Levy Agreements helping mitigate the effects of this tax. Under these agreements, businesses which accept and subsequently meet energy reduction targets will receive a levy discount until the year 2013. The idea is to encourage industry to reduce energy consumption by moving the burden of taxation from energy efficient users to inefficient consumers.

The CCL is effectively a tax on industry, introduced to reduce carbon dioxide emissions that have long been acknowledged as a major factor in global warming. The aim is to reduce inefficient energy consumption by increasing fuel bills by 10 -15%. All business energy supplies will be subject to the levy, although there are some exceptions. It is the UK Government's response to agreements reached at two world summits (Kyoto and Rio). Gases identified as the major causes of the "Greenhouse" effect were targeted for reduction, each country agreed a specific level of reduction and now have set in place emission reduction programmes to achieve these targets.

The revenue raised by the CCL (estimated to be around £1 billion per year) will be re-circulated via a 0.3% cut in employers' National Insurance Contributions (NICs) and also provide financial support (£50M) for energy saving schemes and renewable energy schemes. The levy package is intended to lead to reductions in carbon dioxide emissions of at least 2.5 million tonnes per year by 2010.

The Government is supporting the purchase of new and approved energy efficient equipment for energy intensive users with Enhanced Capital Allowances (ECA's) which allow 100% of the new product cost to be written off in the first year with the resultant savings in tax and improvement in cash flow. Insulation is an approved product within the ECA scheme, so let us help your business to reduce your energy costs by identifying areas of energy loss and finding a solution.

For more information about the CCL and ECAs, there are several websites which can give more detail:

CCL

Climate Change Levy - Introduction at HRMC
Department of Energy and Climate Change


ECA

Enhance Capital Allowances at DECC website
Energy Technology List
Capital Allowances Investment Schemes