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HM Revenue and Customs Brief 11/11

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HM Revenue and Customs -Tax Authorities

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Issued 11th March  2011

Climate Change Levy: changes to the reduced rate and the supplier certification regime

Introduction

Entitlement to a number of Climate Change Levy (CCL) reliefs depends on the end-use of the taxable commodity supplied (details of those reliefs can be found in Notice CCL1/3 Reliefs and special treatments for taxable supplies). To enable their supplier to apply CCL reliefs appropriately, it is the customer's responsibility to determine the proportion of relief that should be applied, and provide their supplier with a certificate (form PP11) for each taxable commodity, declaring the amount of that relief entitlement. At present there is also a requirement for energy suppliers and relief claimants to send a copy of each form to HM Revenue & Customs (HMRC).

CCL legislation will be amended from 1 April 2011 to make changes to the formula used to determine overall relief entitlement (as a result of a change to the level of the CCL reduced rate announced in 2009) and to simplify the requirements for evidencing that entitlement.

Who needs to read this

  • Suppliers of taxable commodities who have customers claiming relief from CCL.
  • Business and public sector consumers who claim a relief from CCL.

Background

Pre-Budget Report 2009 announced a change to the level of the reduced rate available to businesses in a Climate Change Agreement (CCA), with effect from 1 April 2011. Details of this announcement can be found in Pre-Budget Report Note 32 (PDF 26K) published in December 2009. Legislation was subsequently introduced in Finance Act 2010 to amend the level of the reduced rate. Consequential changes are being made from 1 April 2011 to the formula set out at Schedule 1 of the Climate Change Levy (General) Regulations 2001, which is used to calculate the overall relief entitlement.

This change to the reduced rate requires a revision of the PP11 supplier certificate and associated PP10 supporting analysis forms. HMRC have also reviewed the format and use of these forms through informal discussions with both energy suppliers and trade bodies representing relief claimants.

What is changing

The Climate Change Levy (General) (Amendment) Regulations 2011, which come into effect on 1 April 2011, will:

  • amend the relief formula to reduce the amount of relief that can be claimed by businesses in a CCA from 80 per cent to 65 per cent
  • oblige businesses affected by the amendment to the relief formula, or any future changes to the relief formula brought about by changes to relevant CCL reliefs, to submit a new PP11 certificate to their supplier at the time of their first annual review following the amendment
  • remove the current requirements on relief claimants and energy suppliers to send copies of the PP11 forms to HMRC

HMRC are introducing redesigned PP11 (supplier certificate) and PP10 (supporting analysis) forms, which can be accessed from the links in this brief. From 1 April 2011 all businesses eligible to claim end-use reliefs should use these revised forms to certify their overall relief entitlement to suppliers and show HMRC how that overall entitlement was calculated.

Supplier certificate (PP11)

Following talks with energy suppliers we have been able to reduce the amount of information required by 41 per cent, making the form easier and quicker both to complete and use.

Supporting analysis (PP10)

This form has been simplified by removing a number of information requirements that HMRC have agreed with stakeholders are unnecessary. The notes have also been revised to make them clearer and provide a worked example of the relief calculation.

To whom should the forms be sent?

The PP11 supplier certificate should be sent to the energy supplier only. The PP10 should be sent to HMRC only (the address is shown on the form).

Timing

All of the changes outlined in this brief take effect from 1 April 2011.

Further information

Further information can be obtained by contacting the Excise and Customs Helpline on Tel 0845 010 9000.

Notice CCL1/3 Reliefs and special treatments for taxable supplies will be updated shortly.


About the Author

Crown Copyright 2011.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.



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Article Published/Sorted/Amended on Scopulus 2011-03-13 17:45:12 in Tax Articles

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