Budget Briefing - 8th March 2017

Budget Briefing

The Chancellor has delivered the last Spring Budget in 2017; please find enclosed details of those policies that may affect our clients:

Budget Policy Overview

As the UK begins the formal process of exiting the European Union, the Spring Budget puts economic stability first. Following a period of robust economic growth, record levels of employment and a falling deficit, it sets out further progress in restoring the public finances to health. Building on the Industrial Strategy, it goes further in tackling the UK’s productivity challenge.

The Budget sets out actions the government will take to:

  • help young people from ordinary working families across the country get the skills they need to do the high-paid, high-skilled jobs of the future, vital for a competitive workforce
  • give more children the chance to go to a good or outstanding school that sets them up to succeed
  • support the social care system with substantial additional funding, so people get the care they deserve as they grow older, and support both local NHS plans and improvements to Accident and Emergency with new capital investment
  • invest in cutting-edge technology and innovation, so Britain continues to be at the forefront of the global technology revolution
  • continue to bring down the deficit so the UK gets back to living within its means, and can fund public services for the long-term through a fair and sustainable tax system

By investing in the future, the Budget helps make the most of the opportunities ahead by laying the foundations of a stronger, fairer, better Britain – a country that works for everyone.

The Spring Budget also marks the transition to a single fiscal event each year, an autumn Budget.

Energy and Environmental Taxes

Red Diesel

The government will publish a call for evidence on the use of red diesel in order to improve understanding of eligible industries and current use. Evidence is particularly sought on the use of red diesel in urban areas.

Carbon Pricing

The government remains committed to carbon pricing to help decarbonise the power sector. Currently, UK prices are determined by the EU Emissions Trading System and Carbon Price Support. Starting in 2021-22, the government will target a total carbon price and set the specific tax rate at a later date, giving businesses greater clarity on the total price they will pay. Further details on carbon prices for the 2020s will be set out at Autumn Budget 2017.

Levy Control Framework

The government recognises the need to limit costs to businesses and households as the UK decarbonising its energy supplies. The existing Levy Control Framework has helped to control the costs of low carbon subsidies in recent years, and will be replaced by a new set of controls. These will be set out later in the year.

Climate Change Levy (CCL) Main Rates (2017-18 and 2018-19)

CCL main rates will increase in line with RPI from 1 April 2017 and 1 April 2018.

Climate Change Levy Main Rates

Taxable CommodityRate From 01/04/2017Rate From 01/04/2018Rate From 01/04/2019
Electricity (£ per kWh) 0.00568 0.00583 0.00847
Natural gas (£ per KWh) 0.00198 0.00203 0.00339
LPG (£ per kg) 0.01272 0.01304 0.02175
Other taxable commodity (£ per kg) 0.01551 0.01591 0.02653

Climate Change Levy Reduced Rates

Taxable CommodityRate From 01/04/2017Rate From 01/04/2018Rate From 01/04/2019
Electricity 10% 10% 7%
Natural gas 35% 35% 22%
LPG 35% 35% 22%
Other taxable commodity 35% 35% 22%

2EA® are registered Low Carbon Energy Assessors, Consultants and ESOS Lead Assessors, offering both energy management and reduction services ranging from CCL/CHPQA Management to Energy Saving Opportunity Scheme (ESOS) and Carbon Reduction Commitment (CRC) consultancy.

For more information please contact us either by email to info@2ea.co.uk or by calling 01293 521 350.

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