Energy Tax Relief

In an era where energy costs continue to rise, energy-intensive industries face unique challenges. However, there’s good news – the government recognises the importance of supporting these sectors and is offering valuable tax relief incentives to allow businesses to remain competitive in the European market.

The Advantage of Tax Relief for Energy-Intensive Businesses

What is energy tax relief? Energy tax relief schemes, such as the Energy-Intensive Industries (EII) exemption scheme or the Climate Change Levy (CCL) exemption scheme, help energy-intensive industries in the UK to alleviate the financial burden associated with high energy consumption.

Why does it matter? By taking advantage of energy tax relief, your business can significantly reduce its energy tax costs. This means more capital stays within your organisation, enabling you to reinvest in innovation, employee development, or other strategic initiatives and improve your bottom line.

The Climate Change Levy (CCL) Exemption Scheme

The CCL is a tax imposed on businesses and organisations in the UK to encourage the reduction of carbon emissions and promote energy efficiency. It was introduced as part of the government’s commitment to addressing climate change and encouraging sustainable practices.

The CCL exemption scheme allows qualifying businesses to apply for relief from the levy provided they meet specific energy efficiency and carbon reduction criteria.

Who Is Eligible for the CCL Exemption Scheme?

A business may be eligible for up to 100% relief on the CCL charges, with exemptions available for the following:

  • Businesses that use mineralogical or metallurgical manufacturing processes
  • Domestic use, charities, and community heating schemes
  • Supplies used in certain types of transport and in combined heat and power (CHP) plants

The Energy-Intensive Industries (EII) Exemption Scheme

The EII exemption scheme is a programme designed to support EIIs. These industries, which include sectors such as steel, chemicals, and paper manufacturing, play a crucial role in the economy, as they contribute to job creation and economic growth. However, they consume a significant amount of energy in their production processes, and their high energy use can be a financial burden when compared to industries in countries with cheaper energy.

The EII scheme helps to level the playing field by providing financial relief to these industries. The scheme works by offering a discount on their energy costs through an exemption on taxes that fund low-carbon and renewable support schemes.

To qualify for the EII exemption scheme, companies must meet certain criteria to qualify for an EII certificate.

Who Is Eligible for the EII Exemption Scheme?

  • A business that manufactures a product in the UK within an eligible sector that has a specific four-digit NACE code
  • A business that passes a business level test

Find Out More from Our Energy Tax Relief Experts

Our dedicated energy tax relief team specialises in guiding energy-intensive businesses through the complexities of the EII exemption scheme and CCL exemption scheme.

To explore how we can support your business with understanding the intricacies of energy tax relief and your eligibility for the schemes, simply fill in the form below and one of our tax relief professionals will be in touch shortly.

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