Seven questions about one site. You'll see the levy you should be paying and, if one of HMRC's reliefs applies, anything you're paying that you shouldn't and roughly how much you could claim back. The same answers show whether the VAT on the bills looks right. Most business sites don't qualify for a relief, and the check will tell you that too. You don't need to give your name or email. If you look up your company on Companies House, we use it only to point out questions worth a second look, and keep it only if you ask us to email you the result. It is a guide, not tax advice: your supplier decides what goes on your bills.
What is the Climate Change Levy?
The Climate Change Levy (CCL) is a UK tax on the electricity, gas, LPG and solid fuels that businesses and public bodies use. Your supplier adds it to your bill, usually as a line called "CCL" or "Climate Change Levy", pays it to HMRC, and then charges VAT on top. Homes don't pay it. The rates are per kWh:
| From | Electricity (£ per kWh) | Gas (£ per kWh) |
|---|---|---|
| 1 April 2022 | 0.00775 (0.775p) | 0.00568 (0.568p) |
| 1 April 2023 | 0.00775 (0.775p) | 0.00672 (0.672p) |
| 1 April 2024 | 0.00775 (0.775p) | 0.00775 (0.775p) |
| 1 April 2025 | 0.00775 (0.775p) | 0.00775 (0.775p) |
| 1 April 2026 | 0.00801 (0.801p) | 0.00801 (0.801p) |
| 1 April 2027 | 0.00827 (0.827p) | 0.00827 (0.827p) |
Less than a penny a unit sounds small, but it adds up: a site using 200,000 kWh of electricity and 300,000 kWh of gas pays about £4,005 a year, or £4,806 if it can't reclaim the VAT.
Who shouldn't be paying it
The levy isn't a discount every business can claim. It applies to all business, public sector and charity trading use of electricity and gas unless the site falls into one of these cases.
| Relief | Who it's for | How to get it | Backdate? |
|---|---|---|---|
| Small supplies (de minimis) | Any site, business or not, whose bills average no more than 33 kWh of electricity a day (about 1,000 kWh a month) or 145 kWh of gas a day (about 4,397 kWh a month) from one supplier. Only very small sites, such as a kiosk, lock-up or tiny office, use this little: most shops, cafés and offices use more. | No certificate: the supplier should leave the levy off. Ask them to. | Up to 4 years |
| Homes and charity non-business use | Care homes, hospices, student and staff accommodation, flats, and charities for activities they don't charge for. A charity's trading, such as its shops, still pays. If 60% or more of a site qualifies, the whole supply is free of the levy; below that, the qualifying share is. | A VAT and CCL certificate to your supplier. It also cuts the VAT on the bill from 20% to 5%, or to 0% on electricity in Great Britain from 1 October 2026 to 31 March 2027. | Up to 4 years |
| Metallurgical and mineralogical processes | Energy used to make glass, bricks, ceramics, cement and lime, or to smelt, cast and heat-treat metal. Not mining, quarrying or making finished goods from metal. | Work out the exempt share on HMRC form PP10 and give your supplier a PP11 certificate. | Up to 4 years |
| Climate Change Agreement | Only sites running a process listed in a sector's umbrella agreement, with at least 70% of the site's energy going into it: for example parts of food and drink, chemicals, metals, paper, plastics, intensive farming and data centres. 92% off electricity and 89% off gas. | Join through your sector association between 1 January and 31 August, agree a target, pay the fees. | No, only from certification |
| Other exemptions | Energy used as a raw material rather than a fuel, for electrolysis, for some transport, exported, or burned in a certified CHP plant. | PP10 and PP11, or the CHP certification. | Up to 4 years |
Worked examples
Each uses the rates from 1 April 2026, one site, and a claim made in October 2026 that reaches back four years at each year's own rates.
- A café using 40,000 kWh of electricity and 90,000 kWh of gas a year is over both de minimis limits and gets no relief: it should pay about £1,041 a year, and the levy on its bills is right. That is the result for most business sites.
- A very small café using 9,000 kWh of electricity and 30,000 kWh of gas a year (750 and 2,500 kWh a month) is under both de minimis limits, as long as no single bill goes over them. If its bills show the levy, it's paying £312 a year it shouldn't, and can claim back about £1,157.
- A charity care home using 400,000 kWh of electricity and 900,000 kWh of gas, which can't reclaim VAT, would pay £12,496 a year in levy and VAT on it. A care home is domestic premises, so the right figure is nil, and four years of wrong bills come to about £46,511.
- A shop with flats above, where 40% of the energy is used in the flats, should pay the levy on only 60% of its supply: £673 a year instead of £1,121.
- A ceramics maker using 1 million kWh of electricity and 4 million kWh of gas, with 60% of it in its kilns, should pay £16,020 a year rather than £40,050, and can reclaim about £88,814.
- A food manufacturer using 2 million kWh of electricity and 3 million kWh of gas pays £40,050 a year. In its sector's Climate Change Agreement it would pay about £3,925, saving around £36,125 a year before the scheme fees.
How to claim money back
The full walk-through, with the letter and certificate, is in our step-by-step guide to claiming back Climate Change Levy.
- Find the "CCL" or "Climate Change Levy" line on a recent bill for each site, and the kWh it was charged on.
- Run each site through the check above to see which relief applies.
- If a relief applies, send your supplier the certificate it needs: a VAT and CCL declaration for homes and charity use, or a PP11 for exempt processes. For a small supply, just ask them to treat it as domestic.
- Ask the supplier to correct the last four years. They reissue the bills and claim the levy back from HMRC, which normally pays within 30 days of a valid claim.
Energy brokers and specialist recovery firms also make these claims for you, usually for a share of what comes back. If you change supplier, give the new one the same certificate on day one.
The VAT on the same bills
Business electricity and gas normally carry 20% VAT. The same sites that escape the levy usually qualify for the reduced rate of VAT too: supplies averaging no more than 33 kWh of electricity or 145 kWh of gas a day, homes, and a charity's non-business use. The reduced rate is 5%, and from 1 October 2026 to 31 March 2027 it is 0% on qualifying electricity in England, Scotland and Wales (Northern Ireland stays at 5%). Hotels, hospitals and prisons don't count as homes for this.
It only saves money if you can't reclaim VAT, which is the case for most charities, many care homes and small firms that aren't VAT registered. If your bills charge 20% when they shouldn't, ask your supplier to apply the reduced rate and correct past bills. Suppliers can correct VAT errors for up to four years; how far back yours will go depends on the supplier.
Manufacturers have a separate saving to check: the British Industrial Competitiveness Scheme check shows whether a site may be exempted from some of the levies on its electricity. Applications close on 30 November 2026.
Do you need a carbon report first?
For most of the money, no. The reliefs that need only paperwork can be claimed today and backdated four years, whether or not you have ever measured your footprint. Only a Climate Change Agreement asks you to measure and cut first.
| Relief | What you need | Needs a footprint? |
|---|---|---|
| Small supplies (de minimis) | A letter asking your supplier to treat the supply as domestic | No |
| Homes and charity non-business use | A letter and a signed certificate of qualifying use | No |
| Metal and mineral processes | Form PP10 to HMRC and a PP11 certificate to your supplier | No |
| Climate Change Agreement | 12 months of continuous energy data per site as the base year (2022, or the next 12 months you have), sub-meters where under 70% of the site's energy goes into the eligible process, a target to cut energy or carbon, and energy reported to the scheme each target period | The energy record, yes |
It isn't a chicken-and-egg problem. You don't have to have cut anything before you join an agreement: you join with your base year, and the target runs from there. What you do need is the record, site by site and month by month, and that's exactly what a carbon report is built from. Production figures for the target come from your own records.
Start with the levy saving, finish with the report
- Find the money. Run each site through the free check above. In our worked examples, a charity care home might find £12,496 a year and about £46,511 to claim back, and a very small café about £1,157; your supplier decides what is refunded. Most sites will find the levy is right.
- Check every site from your bills. Every Carbon Recycling plan, from Starter at £59 a month + VAT, includes the Climate Change Levy check on all your UK sites. Add your bills, or connect Xero, Sage or FreeAgent, answer four questions per site, and it drafts the letter for each supplier.
- Turn the same bills into your carbon report. The electricity and gas you entered for the levy are most of a typical footprint. Add fuel, travel and waste and you have your SECR table, Carbon Reduction Plan and customer-ready report.
- Use the year of data for a Climate Change Agreement. If the check says an agreement could save you money, your first year of monthly energy by site is the energy side of the base year you'll need, and each year after shows whether you're on target.
Carbon Recycling isn't a tax adviser and doesn't file levy claims or apply for agreements for you: your supplier corrects your bills and reclaims the levy from HMRC, and your sector association handles an agreement.
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