The carbon price floor (CPF) is a tax on fossil fuels used to generate electricity. It came into effect on 1 April 2013. It changes the existing Climate Change Levy (CCL) regime, by applying carbon price support (CPS) rates of CCL to gas, solid fuels and liquefied petroleum gas (LPG) used in electricity generation.
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If you are a generator liable to pay the CPS rates of CCL you must register with HM Revenue & Customs (HMRC). From 1 April 2013, you must account for, declare and pay the CPS rates of CCL due to HMRC using the existing CCL returns procedures.
If you are already registered for CCL, you don't need to register again, but you will need to remember to account for the CPS rates of CCL on your CCL returns from 1 April 2013.
If you are registered under the Combined Heat and Power Quality Assurance (CHPQA) Programme with a generating capacity over 2MW and you use gas, solid fuels or LPG to generate electricity, you will need to register and pay the CPS rates of CCL. The person liable to register will be either:
You need to register with HMRC within 30 days of the date you either make, or intend to make your first deemed taxable supply. For more information about CPS and the requirement to be registered you can read Notice CCL1/6 A Guide to the Carbon Price Floor.
Find out more about Registering for CCL and use form CCL1 to register by following the links below.
As oil is not subject to CCL, the carbon price floor for oils is being achieved through reform of the fuel duty regimes, and in particular changes to the relief on oil used in electricity generation. From 1 April 2013, the amount of fuel duty that you can reclaim on oil used in electricity generation will be adjusted to establish new CPS rates of fuel duty on the following oils:
The CPS rates of fuel duty will apply in relation to any claim for relief on oil used to generate electricity on or after 1 April 2013, irrespective of when that oil was supplied to the generator.
Form EX55 is being amended to enable the CPS rates of fuel duty to be accounted for, and you should continue to submit all claims for relief to the Mineral Oils Relief Centre (MORC) on form EX55 in the usual way. The amended EX55 will have three additional boxes where you will be required to insert the quantity of fuel and the appropriate CPS rate for the fuel used.
As current fuel duty rates are higher than the announced CPS rates of fuel duty, the net effect should be a reduction in the amount of relief you can claim.
Further details will follow in information being sent by HMRC to generators using oils.