National statistics

Climate Change Levy and Carbon Price Floor Bulletin background and references

Updated 10 June 2021

1. Background

Climate Change Levy (CCL) and Carbon Price Floor (CPF) are part of a range of government measures designed to help the UK reduce greenhouse gas emissions.

Climate Change Levy

CCL is chargeable on the industrial and commercial supply of taxable commodities for lighting, heating and power by consumers in the following sectors:

• industry
• commerce
• agriculture
• public administration
• other services

CCL does not apply to taxable commodities used by domestic consumers or charities for non-business use.

All revenue raised through CCL is received back by businesses through a 0.3% reduction in national insurance contributions from employers. This reduction was introduced at the same time as CCL.

CCL is charged on taxable supplies. Taxable supplies are certain supplies of the following taxable commodities:

1. electricity
2. natural gas as supplied by a gas utility
3. petroleum and hydrocarbon gas in a liquid state
4. coal and lignite
5. coke and semi coke of coal or lignite
6. petroleum coke

The following are not taxable commodities for CCL purposes:

1. oil
2. road fuel gas
3. heat
4. steam
5. waste as defined in statute

CCL was announced during the UK government’s 1999 Budget and introduced from April 2001. CCL rates were frozen until April 2007, since when rates have changed each April. The exceptions being 2010 when no rate changes were made and November 2013 when the rate for gas in Northern Ireland was increased to the same rate as the rest of the UK.

Go to Climate Change Levy rates guidance for the latest CCL rates. Historic rates are also available alongside the main bulletin.

Energy intensive businesses who have entered into a Climate Change Agreement (CCA) are entitled to pay a reduced rate of CCL in return for meeting emissions reductions or energy efficiency targets.

Since 1 August 2015, electricity generated from renewable sources is no longer eligible to receive Levy Exemption Certificates (LEC). Following the removal of LECs, there was a transitional period for taxpayers until 31 March 2018. Impacts from this change have been captured within electricity declarations from traders since around June 2019.

Go to Exemptions from Climate Change Levy for more details about CCL exemptions and reliefs.

Also go to Business tax Climate Change Levy for detailed CCL information.

Carbon Price Floor

CPF was announced during the UK government’s 2011 Budget and introduced from 1 April 2013. CPF is a tax on fossil fuels used in the generation of electricity. It was achieved through changes to the existing CCL regime for gas, solid fuels and liquefied petroleum gas (LPG) used for electricity generation. These changes included the introduction of new carbon price support (CPS) rates of CCL.

Go to Excise Notice CCL1/6: a guide to carbon price floor for detailed CPF information.

2. Climate Change Levy and Carbon Price Floor Bulletin methodology

HMRC uses 3 main measures for tax revenue:

1. accruals (when the tax liability occurs)
2. declarations (when HMRC is notified of the liability)
3. cash receipts (when tax is paid to HMRC).

The CCL and CPF Bulletin reports tax revenue in cash receipts.

Data sources

Statistics are based upon administrative data sources which go though detailed internal quality assurance before publication.

Total CCL and CPF receipts statistics are sourced from HMRC bank accounts, as managed by the HMRC Chief Finance Officer (CFO) directorate. Total CCL and CPF receipts statistics are reported in the month payment was confirmed as received within HMRC bank accounts.

The bulletin may include negative receipts statistics when claims for repayments are larger than payments.

Total declarations and individual fuel (electricity, gas, and solid and other fuels) declarations statistics are sourced from CCL and CPF tax returns submitted to HMRC by registered taxpayers.

CCL and CPF taxpayers mainly follow quarterly accounting periods. Tax returns are due by the end of the month following the accounting period. Payment of tax receipts is also generally due to HMRC by the same time, but taxpayers who pay by direct debit are given a 7 day extension.

These accounting periods and payment patterns cause a 1 to 2 month lag between accounting periods ending and receipts being received by HMRC.

Rounding policy

Total CCL and CPF receipts, alongside estimated separate CCL and CPF receipts statistics, are rounded to the nearest million pounds.

Total declarations and individual fuel (electricity, gas, and solid and other fuels) declarations statistics are rounded to the nearest 0.1 million pounds.

Any differences between totals and the sum of their parts within the bulletin is generally due to rounding. Percentage changes featured within the CCL and CPF Bulletin commentary document are calculated using unrounded figures, meaning they can be different to percentage changes calculated using statistics within the bulletins data tables.

Statistics may also show as zero within data tables where there are small negative values because of rounding.

Revisions policy

The latest 3 months of data are marked as ‘provisional’ within data tables.

Statistics which have changed since the previous release are marked as ‘revised’ within data tables. Revisions are only marked when the finalised figure has changed. As statistics are sourced from administrative data, they are subject to some adjustments, particularly during the initial months following publication.

Total CCL and CPF receipts are aligned with the National Audit Office (NAO) audited ‘HMRC annual report and accounts’. This can result in adjustments to March statistics to ensure consistency between reported financial year totals. As such, March statistics are treated as provisional until aligned with the annual report and accounts.

Total declarations and individual fuel (electricity, gas, and solid and other fuels) declarations statistics are revised when amendments are made to returns by taxpayers, causing revisions to underlying data. HMRC also occasionally receives returns on a delayed basis from taxpayers, resulting in revisions to underlying data.

CCL declarations statistics and estimated separate CCL and CPF receipts statistics from February to November 2020 should also be treated with additional caution due to difficulties faced by taxpayers submitting returns during the coronavirus (COVID-19) pandemic. This situation may cause additional future revisions.

Data limitations

The CCL and CPF Bulletin does not include geographical data on where liabilities occurred, as HMRC does not collect this data from taxpayers. But, HMRC do publish experimental statistics which estimate ‘disaggregated tax receipts’ at country level.

Additionally, HMRC does not collect information on when the tax liability arose during the accounting period, meaning that the main cause for the quarterly pattern is the reporting of tax liabilities rather than underlying activity.

HMRC also does not collect sector information for CCL or CPF taxpayers.

The quality of these statistics depends on the purpose they are intended to be used for. For understanding tax liabilities and cash receipts paid for CCL and CPF, these statistics are of high quality as they are based on returns and payments from registered taxpayers. But for other purposes the statistics may not be the most appropriate as the scope of the statistics is defined by tax laws.

It is not possible to provide accurate separate receipts statistics for CCL and CPF because taxpayers pay receipts for both as one. An estimate of separate receipts statistics for CCL and CPF is provided using trader returns data and should be treated with caution.

Although it has been possible to estimate separate CCL and CPF receipts from January 2014 onwards, it has not been possible to estimate for the period April 2013 to December 2013 due to data quality issues.

Pre-release access to statistics

The CCL and CPF Bulletin provides no official pre-release access to the statistics. But as these statistics are sourced from administrative data, they may be used within HMRC for operational reasons before publication. HMRC maintains records of those with pre-release access to the departments National Statistics.

Statistics at HMRC

Go to statistics at HMRC for further information on the departments National and Official Statistics.

3. Contacts

The CCL and CPF Bulletin is produced by the Indirect Tax Receipts Monitoring team as part of the ‘Excise duties, VAT and other tax statistics’ collection.

For statistical enquiries, contact:

S Taylor revenuemonitoring@hmrc.gov.uk

HMRC
Knowledge, Analysis and Intelligence (KAI)
Floor 2 Annex
Albert Bridge House
Manchester
M60 9AF

For media enquiries see HMRC press office.

4. Publication calendar

The CCL and CPF Bulletin is published on the last working day of the month in June and December, with the December date commonly postponed until early January of the next calendar year to provide analytical cover.

Archive versions of the CCL and CPF Bulletin published on GOV.UK after January 2021 are no longer hosted on GOV.UK and are instead available via the UK Government Web Archive, from the National Archives.

Archive versions of the CCL and CPF Bulletin published between April 2013 and August 2019 are found on the UK Trade Info website.

Go to research and statistics for future CCL and CPF Bulletin release date announcements. Announcements are published no later than 4 weeks before the release date.

5. User engagement

HMRC welcomes user engagement to improve the departments National and Official Statistics. You can contact statistics producers on GOV.UK.

We consulted users about indirect tax receipts statistics from 20 November 2015 to 5 February 2016.

The consultation on the reduction and consolidation of HMRC statistics publications, which ran between 8 February 2021 and 12 March 2021, has now closed and the feedback has been analysed.

The Climate Change Levy (CCL) and Carbon Price Floor (CPF) Bulletin was up for consultation in the 2021 survey and from June 2021 will be published annually with Landfill Tax (LFT) and Aggregates Levy (AGL) and known as the Environmental Bulletin.

6. National Statistics

The United Kingdom Statistics Authority (UKSA) has given these statistics National Statistics status. This means that the statistics comply with the Code of Practice for Statistics as set out within the Statistics and Registration Service Act 2007.

National Statistics status can generally be interpreted to mean that statistics:

• meet user needs
• are effectively communicated and accessible
• undergo regular quality assurance reviews
• produced professional and according to sound methods
• managed impartially in the public interest and free of political interference

Contact UKSA for queries about National and Official Statistics.

7. Related statistics

The ‘HMRC tax receipts and National Insurance contributions for the UK’ National Statistics provide the first provisional snapshot of cash receipts statistics each month.

The Public sector finances National Statistics bulletin from the Office for National Statistics (ONS) and HM Treasury (HMT) provides the latest available estimates for key public sector finance statistics each month.

The independent Office for Budget Responsibility (OBR) forecast duty receipts within their ‘economic and fiscal outlook’ publications.

HMRC does not publish a specific tax gap for CCL and CPF, but the ‘Measuring tax gaps’ Official Statistics estimate the tax gap^{[footnote 1]} for all taxes and duties administered by the department.

HMRC publish the ‘Tax ready reckoner’ Official Statistics which show the estimated direct impact on HMRC tax revenues if simple changes were made to various taxes. They are intended to assist researchers and policymakers.

1. Tax gaps are the difference between tax collected and that, which in HMRC’s view, should be collected. ↩