Farmers told to apply for climate change tax discount
© Tim Scrivener The NFU has warned farmers they face rises in climate change taxes unless they register for a discount scheme before the 31 July deadline.
The Climate Change Levy (CCL) is a tax charged on gas, electricity, liquefied petroleum gas (LPG), coal and coke used by UK businesses.
In April 2019, CCL rates levied on energy bills will increase by about 3% for electricity and 7% for gas for any businesses that do not register for a discounted rate under an NFU scheme.
See also: Why farming’s being asked to do more to fight climate change
Under the CCL scheme, eligible businesses can receive a discount in return for meeting energy-efficiency or carbon-saving targets. Achieving these targets will enable the business to receive a discount until March 2023, the NFU says.
The NFU CCL scheme gives up to 93% levy reductions on electricity and 78% on gas to qualifying businesses in the pig, poultry and protected horticulture sectors. It is therefore imperative to sign up to the scheme before the deadline of 31 July, the union warns.
Example of annual CCL savings for poultry farm using 350,000 kWh of import electricity and 45,000 litres of LPG |
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| Year | Non-member pays | CCL member pays | Member saving |
| 2012-13 | £3,615.50 | £1,265.43 | £2,350.08 |
| 2017-18 | £4,608.10 | £605.71 | £4,002.39 |
| 2019-20 | £6,907.75 | £630.36 | £6,277.40 |
In addition to the cost saving, the NFU said joining the scheme would help with business marketing by demonstrating to customers an official and committed approach to improving energy sustainability.
How to join
Once the decision has been made to join the scheme, farmers will be asked to enter into a climate change agreement (CCA), according to advice from the NFU-owned consultancy FEC Energy.
This involves the following steps:
- Provide your base year data (energy and production). The base year should be the continuous 12-month period from January to December 2008 unless there are valid reasons why it is not available – for example, the site wasn’t in production or was run by another operator.
- Check the “70% rule”. You need to provide evidence that you comply with the 70% rule – that the energy you use on the eligible processes alone accounts for more than 70% of the total supplied to each facility.
- Complete a “facility eligibility form” giving all essential details, including an annotated site plan. FEC will check your details and make a formal application for you based on them.