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How to cut your tax bill with Climate Change Agreements

Going green has the double advantage of helping the planet while saving your business money at the same time.

By taking advantage of Climate Change Agreements (CCAs) and other green tax reliefs, you can reduce the amount of Climate Change Levy (CCL) tax your business pays while improving energy efficiency.

But how does it work, and who qualifies?

Who pays Climate Change Levy tax?

The CCL applies to businesses in industrial, public services, commercial, and agricultural sectors, charging them for energy used in heating, lighting, and power.

It does not apply to fuel for road use or other oils already taxed under excise duty.

However, some businesses qualify for tax relief, such as those that:

Additionally, some businesses and organisations may be fully exempt from CCL, including:

How to reduce your CCL bill

If your business does have to pay CCL, there’s a way to reduce the cost: enter into a Climate Change Agreement (CCA) with the Environment Agency.

A CCA is a voluntary deal where your business commits to improving its energy efficiency and reducing energy consumption over time. In return, you get a CCL discount which includes:

To keep receiving the discount, your business must measure and report its energy use and carbon dioxide emissions every two years and meet agreed targets. If you fall short, you risk losing the tax break.

Is a CCA right for your business?

Signing up for a CCA can lower your tax bill while making your business more sustainable.

However, it comes with compliance requirements, so it’s important to assess whether it’s the right move.

To learn more about CCAs and other green tax reliefs, speak to one of our advisers today.

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