CCL - reliefs and special treatments for taxable commodities

HMRC Reference:Notice CCL1/3 (June 2014) View Change History
 

Contents

Foreword

Other notices and forms on this or related subjects

1. Introduction

1.1 What is this notice about?

1.2 What has changed?

1.3 Who should read this notice?

1.4 What legislation covers the issues in this notice?

1.5 CCL liability at a glance

2. Supplies excluded from CCL

2.1 Supply for domestic or non-business charity use

2.2 Meaning of 'domestic' use

2.3 What residential buildings do not qualify for the domestic use exclusion?

2.4 What is the CCL treatment of stair lighting and street lighting?

2.5 De minimis limits

2.6 What is charity non-business use?

2.7 Educational institutions

2.8 Mixed use

2.9 Mixed use VAT certificates

2.10 Third Party Intermediaries

2.11 Intermediaries and domestic/charitable non- business use

2.12 Community heating schemes

2.13 Visiting forces

3. Supplies exempt from the main rates of CCL

3.1 Supplies not for burning or consumption in the UK

3.2 Supplies of LPG or solid fuel for re-sale

3.3 Supplies used in some forms of transport

3.4 Supplies to producers of taxable commodities other than electricity

3.5 Supplies to electricity producers (other than CHPs, small generating stations and stand-by generating stations)

3.6 Supplies by auto-generators or unlicensed electricity suppliers with a generating capacity of more than 2MW

3.7 Supplies to small generating stations (other than CHPs)

3.8 Supplies by small generating stations (other than CHPs)

3.9 Supplies to stand-by generators

3.10 Supplies to CHP stations

3.11 Supplies not used as fuel

3.12 Supplies of electricity from renewable sources

3.13 Supplies of electricity from CHP stations

3.14 Mineralogical and Metallurgical processes

4. Supplies at the reduced rate of CCL for businesses in climate change agreements (CCAs)

4.1 Eligibility for the reduced rate and the CCA scheme

4.2 How do agreement holders tell their energy supplier that they are entitled to pay the reduced rate?

4.3 How does performance under the agreements affect entitlement to the reduced rate?

5. Lower rates

5.1 Supplies of gas in Northern Ireland

5.2 Supplies for use in metal recycling processes

6. Claiming reliefs through certificates

6.1 What must I do?

6.2 Customer and supplier responsibilities

6.3 Review of relief entitlement

6.4 What if I cease to trade?

6.5 Retrospective claim for relief entitlement

6.6 Businesses affected by amendment of the relief formula

6.7 Liability to register for CCL

6.8 Tax credit claims

6.9 When will I receive any repayment?

6.10 Varying a supplier certificate

6.11 Can persons making onward supplies certify entitlement to relief on behalf of qualifying customers?

6.12 Change of supplier

6.13 What happens if I change arrangements with my supplier so that all my electricity is supplied through a renewable contract?

6.14 Must wholesale suppliers of LPG and solid fuels obtain PP11 CCL Supplier Certificates from their customers?

6.15 Other situations

7. PP10 CCL Supporting Analysis

8. PP11 CCL Supplier Certificate

9. Examples of production use qualifying for exemption

9.1 Uses covered by the exemptions set out at paragraphs 3.4 to 3.6

9.1.1 Production sites: exempt uses

9.1.2 Production sites: Non-exempt uses

9.1.3 Sites remote from production

10. Uses of taxable commodities that are to be taken as not being used for fuel purposes

10.1 Wholly non-fuel uses

10.2 Mixed uses

Further help and advice

Your rights and obligations

Do you have any comments or suggestions?

Putting things right

How we use your information

Annex

Guidance on the exemptions for use in mineralogical and metallurgical processes

 

Foreword

This notice cancels and replaces Notice CCL1/3 (October 2013).

Other notices and forms on this or related subjects

Notices

701/19 Fuel and power

701/1 Charities

701/30 Education and vocational training

703 Export of goods from the United Kingdom

275 Export procedures

744A Passenger transport

CCL1 A general guide to climate change levy

CCL1/1 Registering for climate change levy

CCL1/2 Climate change levy: combined heat and power schemes

CCL1/4 Climate change levy: electricity from renewable sources

CCL1/5 Climate change levy: penalties and interest

CCL1/6 A Guide to the carbon price floor

Notice 431 - Visiting Forces

Forms

PP10 CCL Supporting Analysis

PP11 CCL Supplier Certificate

CCL200 X - Climate change levy - tax credit claim

1. Introduction

1.1 What is this notice about?

This notice provides information about supplies of taxable commodities to which the full rates of climate change levy (CCL) do not apply, and the certification and other procedures that must be followed in order to claim the reliefs.

1.2 What has changed?

This notice, dated June 2014, replaces the edition of October 2013. The main changes to its content are in the following parts of the notice (other parts have been re-numbered):

Paragraph/Section


Content


Paragraph 1.5


CCL liability at a glance


Paragraph 2.10


Third Party Intermediaries


Paragraph 2.11


Intermediaries and domestic/charitable non-business use


Paragraph 3.14


Mineralogical and Metallurgical processes


Paragraph 3.14.1


Which processes are eligible for the relief?


Paragraph 3.14.2


Scope of the exemptions


Paragraph 3.14.3


How do I receive the benefit of the exemption?


Paragraph 5.1.1


Duration and scope of the lower rate


Paragraph 5.2.1


Lower rate for metal recycling processes


Paragraph 6.2.1


What is the customer responsible for?


Paragraph 6.2.2


What is the supplier responsible for?


Paragraph 6.5


Retrospective claim for relief entitlement


Paragraph 6.11.3


When may a landlord not give a PP11 CCL supplier certificate on behalf of his tenants


Paragraph 10.2


Mixed Uses


Annex


Guidance on the exemptions for use in mineralogical and metallurgical processes


Unless otherwise specified, references in this notice to 'sections' or 'paragraphs' are to the named section or paragraph in this notice.

1.3 Who should read this notice?

This notice is for energy suppliers and for energy consumers in the business and public sectors that may be liable to the main rates of CCL, and for owners of generators and operators of combined heat and power (CHP) stations who are deemed to make a taxable self-supply that may be liable to the CPS rates of CCL.

Unless indicated to the contrary where we say ‘you’ or ‘your’ we mean the energy generator, energy supplier or energy consumer and where we say ‘we’, ‘our’ or ‘us’ we mean HM Revenue & Customs (HMRC).

1.4 What legislation covers the issues in this notice?

A full list of extant CCL legislation is set out in Notice CCL 1 A general guide to climate change levy.

1.5 CCL liability at a glance

Row


Supplies...


CCL liability...


Paragraph/ section in this notice where more detailed information can be found....


1


for domestic use, and for the non-business use of charities


Nil - Excluded from the main rates of CCL


Section 2


2


of small quantities of fuel and power


Nil - Excluded from the main rates of CCL


Paragraph 2.5


3


to community heating schemes


Nil - Excluded (subject to certification) from the main rates of CCL


Paragraph 2.11


4


to US and NATO visiting forces and American military cemeteries at Madingley and Brookwood


Excluded from the main rates of CCL


Paragraph 2.12 and Notice 431 - Visiting forces


5


not for burning or consumption in the UK


Nil - Exempt (subject to certification) from the main rates of CCL


Paragraph 3.1


6


of liquefied petroleum gas (LPG) and solid fuel for re-sale


Nil - Exempt (subject to certification) from the main rates of CCL


Paragraph 3.2


7


used in some forms of transport


Nil - Exempt (subject to certification) from the main rates of CCL


Paragraph 3.3


8


of taxable commodities to producers other than electricity producers


Nil - Exempt (subject to certification) from the main rates of CCL


Paragraph 3.4


9


to electricity producers (other than CHPs, small generating stations and stand-by generating stations)


Exempt from main rates of CCL, but CPS rates of CCL due on solid fossil fuels, gas and LPG.


Paragraph 3.5 and Notice CCL1/6


10


of electricity by auto-generators or unlicensed electricity suppliers (excluding CHPs) with a generating capacity of more than 2MW


From 1 April 2013, where supplies are produced from CPS rate commodities, they are liable to main rate of CCL for electricity for:


  • self-supplies of electricity or
  • supplies of electricity direct to customers.

Supplies to an electricity utility exempt from main rate of CCL on electricity.


Paragraph 3.6


11


to small generating stations (other than CHPs)


Main rates of CCL charged by supplier (subject to any other reliefs or exemptions). No liability to CPS rates of CCL.


Paragraph 3.7 and Notice CCL 1/6


12


by small generating stations (other than CHPs)


Relief from main rates of CCL available on input fuel used to generate any electricity not self-supplied (no liability to CPS rates of CCL).


Electricity passed to an electricity utility liable to main rate of CCL on electricity when sold on by the utility.


Paragraph 3.8


13


to stand-by generating stations


Main rates of CCL charged by supplier (subject to any other reliefs or exemptions). No liability to CPS rates of CCL.


Paragraph 3.9 and Notice CCL 1/6


14


to CHP stations


Nil - Exempt from main rates of CCL (subject to certification) but CPS rates of CCL due on solid fossil fuels, gas and LPG used to generate electricity where the generating capacity of station exceeds 2MW


Paragraph 3.10 (and Notices CCL1/2 and CCL 1/6)


15


not used as fuel


Nil - Exempt (subject to certification) from the main rates of CCL


Paragraph 3.11


16


of electricity from renewable sources


Nil - Exempt from the main rates of CCL.


Paragraph 3.12 (and Notice CCL 1/4)


17


of electricity from CHP stations


Treated for CCL purposes (main rates of CCL) according to its Secretary of State and CHPQA certificates.


Paragraph 3.13 (and Notice CCL1/2)


18


to customers who have climate change agreements


Reduced rate (subject to certification), which is a reduction on the main rates of CCL.


Section 4


19


of gas for burning in Northern Ireland


Lower rate of the gas main rate of CCL from 1 April 2011 until 31 October 2013.


From 1 November 2013 the full gas main rate of CCL applies.


Paragraph 5.1


20


for use metallurgical and mineralogical processes


Nil - Exempt from main rates of CCL (subject to certification)


Paragraph 3.14


2. Supplies excluded from CCL

2.1 Supply for domestic or non-business charity use

A supply is excluded from the main rates of CCL if it is for domestic use or use by a charity for its non-business activities. The domestic and charitable exclusions are based on the VAT fuel and power 'qualifying use' provisions contained in Notice 701/19 Fuel and power.

2.2 Meaning of 'domestic' use

Domestic use means use in:

  • armed forces residential accommodation
  • caravans
  • children’s homes
  • homes for the elderly and disabled
  • hospices
  • houseboats
  • houses, flats or other dwellings
  • monasteries, nunneries and similar religious communities
  • school and university residential accommodation for students and pupils
  • self-catering holiday accommodation, or
  • supplies to community heating schemes.

Buildings such as garages used with houses are treated as part of the same residential unit. Subsidiary buildings situated a short distance away, for example a garage in a block located away from a house, are also treated as part of the same residential unit. Corridors, lifts, hallways and stairways in a residential unit are treated as part of the domestic premises.

2.3 What residential buildings do not qualify for the domestic use exclusion?

Subject to the de minimis provisions set out at paragraph 2.5, if a building is in use as a hospital, a prison or similar institution, a hotel, inn or similar establishment, supplies made to it are not for domestic use. However, see paragraph 2.8 for guidance on mixed use.

2.4 What is the CCL treatment of stair lighting and street lighting?

Stair lighting for domestic accommodation is not subject to the main rate of CCL. However, supplies of energy for stair lighting in any commercial property or for street lighting in general are within its scope, unless the amounts involved are de minimis (see paragraph 2.5).

2.5 De minimis limits

Small quantities (de minimis) of fuel and power may automatically be treated as supplies for domestic use, even where they are supplied to a business. The de minimis limits for each fuel are as follows:

If the supply is of…


the de minimis amount is…


Coal or coke


a supply of not more than one tonne held out for sale as domestic fuel (that is, domestic grade fuel).


Piped gas


a supply by the same supplier at a rate of not more than 4,397 kilowatt hours per month of gas of a kind supplied by a utility or petroleum gas, to one customer at any one of the customer’s premises.


(This quantitative limit applies regardless of whether the bill is based on a meter reading by either the supplier or the customer or on an estimate.)


Metered electricity


a metered supply to a person at any premises where the electricity (together with any other electricity provided to him at the same premises by the same supplier) is provided at a rate not exceeding 1,000 kilowatt hours per month.


(This quantitative limit applies regardless of whether the bill is based on a meter reading by either the supplier or the customer or on an estimate.)


Un-metered electricity


an un-metered supply to a person where the electricity (together with any other electricity provided to him by the same supplier) is provided at a rate not exceeding 1,000 kilowatt hours per month.


LPG in cylinders


a supply containing any number of cylinders, each of which is less than 50 kilograms net weight.


LPG in bulk


a supply of LPG not in cylinders, to a customer at premises that have a tank capacity of not more than two tonnes.


(Storage tanks are not filled to the limit of their holding capacity for safety reasons. The capacity is therefore to be calculated based on the maximum quantity that tanks can safely hold, as certified by the tank provider.)


Within the above limits there is no requirement for such supplies to be certified as being for domestic use, although the supplier must keep records to substantiate the treatment of the supply.

2.6 What is charity non-business use?

Supplies for use by a charity for its non-business activities are excluded from the main rates of CCL. Charities are normally non-profit making bodies whose objectives include the relief of poverty, sickness or infirmity or other activities beneficial to the community such as the advancement of education, religion, nature conservation and the support of the Arts.

Charities may also carry out business activities and, unless the de minimis limits set out in paragraph 2.5 apply, the main rate of CCL is due on supplies used for these activities. Examples of business activities by charities include:

  • the sale of donated goods
  • the hiring of charity run buildings (for example, village halls), and
  • the provision of membership benefits by clubs, associations and similar bodies.

An activity may still be a business activity even if charges are only set to recover costs incurred - it is not necessary to make a surplus for an activity to be business. If a charity is carrying out both business and non-business activities on the same premises then it may apportion its consumption per account between excluded and taxable use and advise its energy supplier(s) accordingly. See Notice 701/1 Charities.

In order to claim this relief, a VAT certificate must be provided to the supplier. See Notice 701/19 Fuel and power.

2.7 Educational institutions

Supplies of fuel and power to educational institutions such as schools, sixth form colleges, further education colleges and universities are subject to the main rate of CCL unless the institution is a charity engaged in non-business activities.

Information about the business status of educational institutions can be found in Notice 701/30 Education and vocational training.

2.8 Mixed use

Where supplies are made to a customer whose premises are put partly to domestic or non-business charity use:

  • if the domestic or charity use is at least 60 per cent of the total use, the whole supply can be treated as such and is not subject to the main rate of CCL, or
  • if the domestic or charity use is less than 60 per cent of the total use, the main rate of CCL must be applied to that portion that does not qualify for relief.

2.9 Mixed use VAT certificates

Where you supply fuel and power for mixed use you should obtain from your customer a VAT certificate declaring what percentage is, or will be, put to domestic or charitable non-business use for each of the premises you supply and apply relief from CCL on this basis.

2.10 Third Party Intermediaries

Ofgem updated their guidance on Third Party Intermediaries (TPI) on 11 October 2013. The factsheet ‘What your business needs to know’ provides a definition of what a TPI is and states that it’s the energy supplier that provides the energy to businesses, not the TPI. The energy and contract is supplied by the energy supplier and will include the energy supplier's terms and conditions.

2.11 Intermediaries and domestic/charitable non- business use

Where there is domestic or charitable non-business use and there is an intermediary in the supply chain (e.g. supplies to a tenant made via a landlord) the standard rate of VAT may apply. For CCL the domestic or charitable non-business use relief depends upon the use to which the commodity will be put, and the fact that there is an intermediary in the supply chain should not affect the relief if the utility is aware that the commodity is for domestic or charity use. Therefore if the intermediary wants to be excluded from the main rate of CCL, they will need to submit a CCL declaration to their energy supplier which should include the following information:

  • Customers (end users) name and address.
  • It relates to a domestic or charity non-business qualifying use.
  • Percentage of use eligible for the exclusion of CCL.
  • Declaration that the information is correct and complete and signature.

In this scenario the standard rate of VAT will apply but the main rate of CCL will not be charged. As the exclusion is based on use of the commodity, an intermediary does not need to apply for a utility direction in these circumstances.

2.12 Community heating schemes

The CCL exclusion for domestic use includes energy supplied to one party for use for the centralised provision of heat to a number of sites or users, for instance a common boiler heating a block of flats. This arrangement is commonly known as a ‘community heating scheme’. Whether the supplier should charge the main rate of CCL will depend on whether an extant VAT certificate covers the community heating scheme. Where it does, the supply is excluded from CCL automatically. Where it does not, the main rate of CCL must be charged on bills unless the customer claims and certifies relief to the supplier on Form PP11 CCL Supplier Certificate (see section 6).

2.13 Visiting forces

If you are a UK VAT registered business and registered for CCL, provided you fulfil the conditions described in Notice 431 Visiting Forces, you can supply fuel and power to US and NATO visiting forces without having to account for the levy. You can also make levy free supplies of fuel and power to the American Military Cemetery and Memorial at Madingley, Cambridge or Brookwood, Surrey provided they are solely used for the maintenance of those cemeteries. Further information about reliefs to visiting forces is set out in Notice 431 Visiting Forces.

3. Supplies exempt from the main rates of CCL

3.1 Supplies not for burning or consumption in the UK

Taxable commodities supplied to destinations outside the UK are entitled to relief from the main rates of CCL. Where you are making supplies to destinations outside the UK, you must retain and make available to us documentary evidence that confirms the commodities were removed from the UK. The documentary evidence you must hold is the same as required for VAT purposes, and detailed in Notice 703 Export of goods from the United Kingdom.

On occasion, an intermediate customer in the UK may make the export supply. Such intermediate customers must notify the UK supplier using form PP11 CCL Supplier Certificate or written equivalent (see section 6) that they are exporting the commodity and have no intention of bringing it back to the UK.

The export procedures and our legal requirements are described in detail in Notice 275 Export procedures.

3.2 Supplies of LPG or solid fuel for re-sale

If your sole intention is to sell solid fuels and LPG to another person for non-taxable use (examples include hardware stores selling LPG or garages selling bags of coal) the supplies of those commodities to you are free of CCL and you are not required to register for CCL purposes.

Wholesalers and retailers of LPG in bulk and solid fuels must notify their suppliers that they intend to make onward supplies, using form PP11 CCL Supplier Certificate or written equivalent (see section 6). The Solid Fuel Association has devised a simplified PP11 form for use by coal merchants among its membership.

If wholesalers and retailers are also making taxable supplies to end-users they must register and account for the main rate of CCL on those supplies.

Because of the de minimis arrangements explained at paragraph 2.5, supplies of LPG in cylinders of less than 50 kilograms each in weight are not taxable for CCL purposes.

3.3 Supplies used in some forms of transport

A supply of a taxable commodity is exempt from the main rate of CCL if it is used for transport in the following categories:

  • to propel a train, for example to electrify train lines
  • to propel a non-railway vehicle transporting passengers, for example to power a ferry
  • in a railway vehicle or non-railway vehicle transporting passengers, for example to light a railway carriage
  • in a railway vehicle transporting goods, for example to light the cab interior of a freight train, or
  • in a ship during a journey which is at any time outside territorial waters, for example to light a marine freight vessel.

The meanings of 'Railway vehicle' and 'train' are those given at section 83 of the Railways Act 1993:

'Railway vehicle includes anything which, whether or not it is constructed or adapted to carry any person or load, is constructed or adapted to run on flanged wheels over or along track'.

'Train' means -

(a) two or more items of rolling stock coupled together, at least one of which is a locomotive, or

(b) a locomotive not coupled to any other rolling stock'.

'Non-railway vehicle' means any vehicle (other than a railway vehicle), or a ship, that is designed or adapted to carry not fewer than 12 passengers.

The exemption does not apply to the transportation of passengers to, from or within a place of entertainment, recreation or amusement, or a place of cultural, scientific, historical, or similar interest if rights of admission or use of facilities are supplied by the person (or a connected person) to whom the taxable commodity is supplied. For example, supplies of the energy used to run transport at theme parks, or to run historical transport such as trams within museums, are not exempt. This treatment mirrors the VAT legislation that applies a zero rate to tickets sold for normal transportation purposes but applies VAT at the standard rate to tickets sold in the aforementioned circumstances (see Notice 744A Passenger transport for further information).

To claim the exemption customers must declare to their suppliers that the commodities are being consumed for qualifying purposes (see section 6).

3.4 Supplies to producers of taxable commodities other than electricity

To avoid double taxation, a supply of a taxable commodity is exempt from the main rates of CCL if it is used in the production of taxable commodities other than electricity or the production of other energy sources that are subject to duty (for example, oils liable to hydrocarbon oil duties) or which may be used specifically for energy production. In order to obtain relief, supplier certificates must be provided (see section 6).

The exemption applies to taxable commodities supplied for use in the production of:

  • taxable commodities other than electricity
  • hydrocarbon oil or road fuel gas
  • fuel substitutes defined by the Hydrocarbon Oil Duties Act 1979, and
  • uranium for use in an electricity generation station.

For the purposes of the exemption, the production of other energy sources includes the drilling and extraction of oil, but does not include oil exploration.

For a supply of a taxable commodity to be exempt under this relief the energy user and the energy producer must be one and the same entity. Therefore, sub-contractors in the oil industry cannot benefit from this exemption on the taxable commodities they purchase and use unless they themselves are refining or extracting oil. As a result, the energy supply to and used by a sub-contractor employed by a producer as an engineering consultant (for example) is ineligible for the exemption and the beneficiaries of the relief are confined to those companies involved in actual production activity.

Examples of exempt and taxable uses are given at section 9.

3.5 Supplies to electricity producers (other than CHPs, small generating stations and stand-by generating stations)

Exemption from the main rates of CCL can be claimed on a supply of a taxable commodity if it is to be used for producing electricity in a non-CHP generating station, provided that it is not deemed to be a self-supply of electricity (see Notice CCL1 A general guide to climate change levy). From 1 April 2013, this includes supplies to auto-generators and unlicensed suppliers, but excludes supplies to all small generating stations.

However, from 1 April 2013, the CPS rates of CCL apply to taxable commodities (other than electricity) that are used in a generating station with a generating capacity that exceeds 2MW. The owner of the generating station is the person responsible for accounting for the CPS rates of CCL to HMRC.

The liability of supplies used in electricity generation is explained in more detail in Notice CCL1/6 A guide to the carbon price floor.

3.6 Supplies by auto-generators or unlicensed electricity suppliers with a generating capacity of more than 2MW

From 1 April 2013, if you are an auto-generator or exempt unlicensed electricity supplier with a generating capacity of more than 2MW (and are not a CHP or stand-by generator) and you make self-supplies of electricity or make supplies of electricity direct to customers, your supplies of electricity will be subject to the main rate of CCL for electricity where these are produced from CPS rate commodities.

If you make supplies to an electricity utility, these supplies will not be subject to CCL as the electricity will be liable to the main rate of CCL for electricity when sold on to a consumer by the utility.

You are an auto-generator if you generate electricity primarily for your own use and you have title to the input and output fuel. Primarily for your own use means:

(a)You are not treated as an electricity utility for the purposes of any supplies of electricity you make, and

(b) you have consumed, in the previous 3 months, no less than 75 per cent of the electricity produced by you in that period.

3.7 Supplies to small generating stations (other than CHPs)

If you are generator with a combined generating capacity of 2MW or less, you are considered to be a small generating station and you will be charged the main rates of CCL on taxable commodities by your supplier. Paragraph 3.8 below set outs the liability to main rates of CCL on supplies by small generating stations.

You do not need to register or account for the CPS rates of CCL, as there is no deemed supply when a quantity of a CPS rate commodity is delivered to the site of the generating station.

When calculating generating capacity for a non-CHP generating station, you must take account of all generators that you own or are owned by any person connected with you (even if they burn oil only), regardless of whether the electricity is generated from CPS rate commodities, but excluding any CHP stations or stand-by generators.

The liability of supplies used in electricity generation is explained in more detail in Notice CCL1/6 A guide to the carbon price floor.

3.8 Supplies by small generating stations (other than CHPs)

If you are a small generator and pass some of the electricity you produce to an electricity utility for onward supply to a consumer, you may obtain relief from the main rates of CCL on the fuel that is used to generate that electricity. Relief from CCL on this fuel is obtained via the certification process outlined in section 6. There is no liability to the CPS rates of CCL for fuels used by small generators.

The electricity you pass to an electricity utility will be liable to the main rate of CCL on electricity when sold on by the utility.

3.9 Supplies to stand-by generators

Supplies of taxable commodities for use in stand-by generators are subject to the main rates of CCL charged by your supplier.

Stand-by generators, for the purposes of CCL, are generators used to provide emergency electricity supplies in the event of a failure of a building’s usual electricity supply, and used for no other purpose.

You do not need to register or account for the CPS rates of CCL, as there is no deemed supply when a quantity of a CPS rate commodity is delivered to the site of the stand-by generator, and you do not need to account for CCL on the electricity produced.

Generators that are used for the generation of electricity in order to supply to, or reduce demand from, the grid do not qualify as stand-by generators.

Running generators for routine testing and maintenance purposes does not disqualify them from being stand-by generators.

3.10 Supplies to CHP stations

A supply of a taxable commodity may be exempt from the main rates of CCL where it is to be used in producing any outputs from either a fully exempt or partly exempt CHP station:

  • A fully exempt CHP means a CHP station in respect of which there is in force a certificate (a 'full-exemption certificate') given by the Secretary of State for DECC stating that the station is a fully exempt CHP for the purposes of CCL.
  • A partly exempt CHP means a CHP station in respect of which there is in force a certificate (a 'part-exemption certificate') given by the Secretary of State for DECC stating that the station is a partly exempt CHP station for the purposes of CCL.

'Outputs' are any electricity or motive power produced in the station and any of the following supplied from the station, namely:

(a) heat or steam, or

(b) air, or water, that has been heated or cooled.

Supplier certificates are also required in order to obtain relief from the levy (see section 6).

Information on the extent of the CCL relief that is available on input fuel used in CHP stations can be found in section 3 of Notice CCL1/2 Climate change levy: combined heat and power.

A supply of coal or other solid fuel, LPG or gas after 1 April 2013 to a CHP station with a generating capacity of more than 2MW is liable to the CPS rates of CCL if it is used to generate electricity. See Notice CCL1/6 A guide to the carbon price floor.

More details about the CHPQA are available at CHPQA - Quality Assurance for Combined Heat and Power on the DECC website.

3.11 Supplies not used as fuel

A supply of a taxable commodity is exempt from the main rates of CCL if the person to whom the supply is made intends to use the commodity for non-fuel use (that is, other than for heating fuel or motive power). An example of such eligible use is electricity used in electrolytic processes.

A supply of a taxable commodity is also exempt where it is intended to be used partly as fuel and partly not (‘mixed use’), provided its primary use is other than as fuel.

A list of eligible non-fuel uses and mixed uses of taxable commodities may be found in section 10. If you consume energy for these eligible uses and wish to claim this relief you must certify to your supplier that this is the case (see section 6).

3.12 Supplies of electricity from renewable sources

Supplies of electricity generated from renewable sources are exempt from CCL.

Electricity is 'renewable source electricity' if it is generated from sources of energy other than peat, fossil fuel or nuclear fuel and includes biomass and waste. Waste is regarded as a renewable source for the purposes of the exemption provided fossil fuel does not make up 90 per cent or more of its energy content.

Fossil fuel means coal, substances produced directly or indirectly from coal, lignite, natural gas, crude liquid petroleum, or petroleum products (and 'natural gas' and 'petroleum products' have the same meanings as in the Energy Act 1976).

Renewable source technologies eligible for exemption are:

  • wind energy
  • hydro-power up to 10 Megawatts
  • tidal power
  • wave energy
  • photovoltaics
  • photoconversion
  • geothermal hot dry rock
  • geothermal aquifers
  • municipal and industrial wastes
  • landfill gas
  • gas produced from the treatment of sewage
  • agriculture and forestry wastes, and
  • energy crops.

Notice CCL1/4 Climate change levy: electricity from renewable sources provides guidance on when a supply of renewable source electricity is exempt from CCL, the conditions that must be fulfilled and the procedures involved in applying the exemption.

There is no requirement to provide forms PP10 CCL Supporting Analysis and CCL PP11 CCL Supplier Certificate to gain exemption. However, when claiming other reliefs renewable source supplies must be deducted.

3.13 Supplies of electricity from CHP stations

CHP integrates the production of usable heat and power in a single process. CHP stations are energy efficient in operation, providing very significant fuel savings and thus cost and efficiency savings, over conventional forms of electricity generation and heat supply.

Where a CHP station is registered and certified annually under the CHPQA programme and in possession of a valid CCL Exemption Certificate issued by DECC’s Secretary of State, it is treated for CCL purposes according to its CHPQA certificate.

Information on the CCL treatment of electricity from CHP stations, including advice about arrangements for the removal of the exemption from 1 April 2013 for electricity produced in a CHP station that is supplied to the final consumer by an electricity utility, can be found in notice CCL 1/2 Climate change levy: combined heat and power.

3.14 Mineralogical and Metallurgical processes

Mineralogical or metallurgical processes are exempt from the main rates of CCL for energy used in mineralogical processes or metallurgical processes, from 1 April 2014.

Businesses that currently participate in the Climate Change Agreement (CCA) scheme (see section 4) and become wholly exempt from the main rates of CCL as a result of the introduction of these new exemptions may choose to withdraw from the CCA scheme. However, where businesses continue to derive a benefit from the CCA scheme (because not all of their energy use will qualify for the new CCL exemptions) they will be able to retain their agreements. To avoid the unintended consequence that businesses withdrawing from the CCA scheme will become liable to enrol in the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, an exemption from the CRC scheme will be introduced that mirrors the scope of these new CCL exemptions.

A list of the mineralogical and metallurgical processes that qualify for exemption are attached in the Annex to this notice. The Annex also provides guidance on energy uses accepted as falling within the scope of the exemptions, where incurred in the course of a qualifying process.

To claim the exemption, customers must declare to their suppliers that the commodities are being consumed for qualifying purposes (see section 6).

4. Supplies at the reduced rate of CCL for businesses in climate change agreements (CCAs)

4.1 Eligibility for the reduced rate and the CCA scheme

Energy intensive businesses that have entered into a climate change agreement (CCA) with the Environment Agency (EA) can claim the reduced rate of CCL, which is a reduction on the main rates of CCL.

For the purposes of the CCL, a taxable supply is a reduced-rate supply if:

  • (a) the taxable commodity is supplied to a facility certified by the EA as a facility which is to be taken as being covered by a CCA for a period specified in the certificate, and
  • (b) the supply is made at a time falling in that period.

The level of the reduced rate varies according to taxable commodity. The rates are set out in Notice CCL 1 A general guide to climate change levy.

Energy intensive users are either those:

  • that operate Part A installations within the meaning given in regulation 3(2) of the Environmental Permitting (England and Wales) Regulations 2007; or
  • whose predicted energy costs amount to 10 per cent or more of their production value, or whose predicted energy costs amount to between 3 per cent and 10 per cent of their production value and who also experience an import penetration ratio of at least 50 per cent.

Facilities covered by a CCA are required to deliver energy efficiency or carbon saving reduction targets in return for paying a reduced rate of CCL.

The overall policy responsibility for the agreements lies with DECC but the scheme is administered by the EA. Applications to join the scheme and queries regarding eligibility should be made to the EA. Our role is limited to overseeing the application of the reduced rate of CCL once a business has been certified by the EA as a participant of the scheme.

Once the EA has received, checked and accepted the agreement and eligibility forms from the sector association, a CCA certificate is issued to the agreement holder and a copy sent to the sector association. The agreement notices may be found on the EA website. The certificate is used by the facility to support a claim for relief of CCL from HMRC. It sets out the date from which the CCL relief will apply.

For information about CCAs is available on the EA website.

In certain circumstances the EA might issue a variation certificate. If a variation occurs, the agreement holder must submit revised versions of the CCL PP10 Supporting Analysis and PP11 CCL Supplier Certificate forms reflecting the change in their entitlement to CCL relief (see section 6).

4.2 How do agreement holders tell their energy supplier that they are entitled to pay the reduced rate?

Once a climate change agreement is signed, CCA holders should use the certification process outlined in section 6 to tell their energy supplier that they are entitled to pay the reduced rate of CCL (and, where appropriate, when they cease to be entitled). The reduced rate is applicable to supplies that are made at a time falling within the period covered by the agreement.

4.3 How does performance under the agreements affect entitlement to the reduced rate?

Performance under the CCA scheme is reviewed regularly. If a facility has not met its targets under the scheme during one period, it may not be certified by the EA as eligible to continue to receive CCL reduced-rate supplies during the next period. In these circumstances the CCA holder must give its energy supplier a form PP11 CCL Supplier Certificate (see section 6) to terminate the reduced rate relief

5. Lower rates

5.1 Supplies of gas in Northern Ireland

5.1.1 Duration and scope of the lower rate

Between 1 April 2001 and 31 March 2011 supplies of gas in Northern Ireland were exempt from CCL. That exemption was replaced by a lower rate with effect from 1 April 2011. The lower rate of CCL applies to supplies of gas in Northern Ireland that are made, or treated as being made, during the period 1 April 2011 to 31 October 2013.

From 1 November 2013, the main rate of CCL for gas applies to supplies of gas in Northern Ireland.

5.1.2 Interaction of the lower rate of CCL and the reduced rate of CCL applicable under the CCA scheme

Businesses in Northern Ireland in the CCA scheme are not able to claim the CCA discount on their gas supplies between 1 April 2011 and 31 October 2013. However, the level of the lower rate make sure that Northern Ireland gas consumers that are in a CCA receive comparable treatment during this period with similar businesses in Great Britain.

Supplies of gas for burning in Northern Ireland can still benefit from relevant exemptions and exclusions listed in sections 2 and 3.

5.2 Supplies for use in metal recycling processes

5.2.1 Lower rate for metal recycling processes

From 1 April 2014, the lower rate for metal recycling processes has been superseded by the exemption for energy used in metallurgical processes (see paragraph 3.14).

6. Claiming reliefs through certificates

6.1 What must I do?

With the exception of the lower rate for gas supplied in Northern Ireland, and the exemptions for renewable source electricity and certain supplies from a CHP, where you are claiming a relief from the main rate of CCL you must complete two forms.

The first of these, form PP10 CCL Supporting Analysis (see section 7), sets out what reliefs you want to claim and requires you to estimate your usage against each relief. This information is then used to calculate your overall percentage relief entitlement. Explanatory notes can be found on the form.

The second form, the PP11 CCL Supplier Certificate (see section 8), takes the information from your PP10 form to arrive at one overall composite relief percentage for a given taxable commodity that will be applied by the energy supplier to your energy bill.

6.2 Customer and supplier responsibilities

6.2.1 What is the customer responsible for?

The customer must:

  • fully and accurately complete the appropriate boxes on the PP11 CCL Supplier Certificate and PP10 CCL Supporting Analysis form. (Any errors on the supplier certificate that result in an underpayment of levy could render the customer liable to a penalty - see Notice CCL 1/5 Climate change levy: penalties and interest.)
  • deliver the PP11 CCL Supplier Certificate to the supplier at a specified address ('address' means a postal address, an email address, or an internet address. Although energy suppliers must accept PP11s from their customers on paper acceptance by email or by the internet is at the supplier’s discretion.)
  • provide us with the PP10 CCL Supporting Analysis form
  • be able to prove, if necessary, the date on which the energy supplier received the supplier certificate (for example, where paper supplier certificates are submitted by post, the customer may wish to use recorded delivery)
  • only submit a retrospective PP11 CCL Supplier Certificate if there isn’t one already in place (see section 6.5)
  • review their entitlement to reliefs and exemptions at least annually
  • review their entitlement to relief where circumstances cause a change in the account details
  • submit a new PP11 CCL Supplier Certificate to their energy supplier and PP10 CCL Supporting Analysis form to us

    - showing a relief claimed of 0 per cent where there is no longer any entitlement to any relief, or

    - where there is a change in the ownership of the business claiming relief
  • submit a PP11 CCL Supplier Certificate to a new energy supplier and the PP10 CCL Supporting Analysis form to us where there is a change of supplier, and
  • retain copies of both forms for verification by us.

6.2.2 What is the supplier responsible for?

The supplier must:

  • accept paper PP11 CCL Supplier Certificates from its customers - it may also wish to offer an electronic facility such as email or an internet page
  • make sure that the relief claimed is applied to the stated account (the supplier may be required to account for any CCL due as a result of errors in applying the relief)
  • accept a retrospective PP11 CCL Supplier Certificate from its customers only if there isn’t one already in place (see section 6.5)
  • retain PP11 CCL Supplier Certificates for inspection by us, and
  • process correctly completed PP11 CCL Supplier Certificates within five working days of receipt.

6.3 Review of relief entitlement

Customers must review the correctness of PP11 CCL Supplier Certificates no later than the earlier of:

  • the sixtieth day following the anniversary of the date on which the PP11 CCL Supplier Certificate was delivered to the supplier, or
  • the sixtieth day after the customer has burned (or in the case of electricity, consumed) the last of the taxable commodity supplied to which the PP11 CCL Supplier Certificate relates.

When a customer's review identifies differences between actual relief entitlement and the amount of relief claimed in a review period, action must be taken in accordance with (a) or (b) below:

(a) Where the amount of relief claimed is found to be too high resulting in an underpayment of CCL, the excess is treated as being a taxable self-supply and you must notify us of your liability to register, although in certain circumstances exemption from registration may be granted (see paragraph 6.7). You must not submit a retrospective certificate to your energy supplier to correct the previous percentage of relief applied.

(b) Where the relief claimed is found to be too low resulting in an overpayment of CCL, a claim for tax credit must be made (see paragraph 6.8).

Where the relief entitlement claimed matches the actual entitlement, no action is required and your certificate remains in force.

A correct PP11 CCL Supplier Certificate can remain valid for a maximum of five years, after which a new one must be submitted to the energy supplier.

6.4 What if I cease to trade?

Where you cease to trade, a review of your certified entitlement to CCL reliefs must be carried out in accordance with the guidance in paragraph 6.3.

A review must also be carried out when a business changes hands. In this case, although the energy consumption position might not change, the tax liability cannot pass to the new owner. The new business owner will have to complete their own PP11 CCL Supplier Certificate for use by their energy supplier.

6.5 Retrospective claim for relief entitlement

If any of the following examples have lead to your energy supply being charged at the full rate of CCL:

  • A change of supplier
  • A change of within a Climate Change Agreement, or

    • An administration oversight.

You may seek any foregone relief entitlement up to maximum of four years by submitting a retrospective PP11 CCL Supplier Certificate to your energy supplier. If you already have submitted a PP11 CCL Supplier Certificate to your energy supplier and have under-claimed your relief entitlement, you may be reimbursed by submitting a CCL200X to HMRC.

This does not apply to supplies for domestic or non-domestic charity use. You may seek retrospective claim for these supplies by submitting a VAT reduced rate certificate to your energy supplier.

6.6 Businesses affected by amendment of the relief formula

A relief formula is set out in the Climate Change Levy (General) Regulations 2001, which is used to determine the amount of levy relief that can be claimed by businesses claiming reliefs that use the supplier certificate regime. This formula is updated whenever there is a change to the level of a relief that uses the supplier certificate regime. For example, the reduced rate of CCL (that applies to facilities in CCAs) on electricity only was amended from 1 April 2013, necessitating an amendment to the formula.

Businesses affected by any change to the relief formula must give their energy supplier a new PP11 CCL Supplier Certificate at the time of their first annual review following the amendment to the formula.

6.7 Liability to register for CCL

If you make taxable supplies - including taxable self-supplies - you must notify us accordingly and register for CCL. Unlike VAT there is no registration threshold.

However, where a liability to register arises solely as a result of the review of relief entitlement, we may exempt a person from registration under certain conditions.

Further information on applying for exemption from registration and the conditions that must be satisfied can be found in Notice CCL1/1 Registering for climate change levy.

6.8 Tax credit claims

All claims for tax credit should be made on form CCL 200 X - Climate change levy - tax credit claim and submitted to:

Central Collection Unit (CCL X)
HM Revenue & Customs
Alexander House
Southend on Sea
SS99 1AY

6.9 When will I receive any repayment?

We expect to authorise repayment of an acceptable claim within a reasonable period - normally 30 days from the date the claim for tax credit is received. But if we have to make enquiries about your claim or sort out errors, the 30-day period can be extended while enquiries are made.

6.10 Varying a supplier certificate

You may give your supplier a further certificate updating the information in the original supplier certificate at any time to reflect anticipated or actual events.

6.11 Can persons making onward supplies certify entitlement to relief on behalf of qualifying customers?

6.11.1 Supplies from a utility via a landlord or other third party

In some cases, the final consumer may not receive its supply direct from a utility, perhaps because it is a tenant of the person who receives supplies from the utility, or because of some other arrangement such as bulk buying under which one person receives the supply from the utility and makes onward supplies to others. Under normal circumstances, the consumer might be eligible for one or more of the reliefs detailed at sections 2 to 4 but unable to benefit from them because it cannot give the utility a supplier certificate.

In the paragraphs below the terms landlord and tenant should be regarded as applying equally to parties with similar supply arrangements unless otherwise specified.

6.11.2 Circumstances in which a landlord may submit a supplier certificate on his tenant's or tenants’ behalf

Taxable commodities used in transport

A third party receiving the supply direct from the utility may give the utility a PP11 CCL Supplier Certificate on behalf of a consumer who intends to use the taxable commodities for transport purposes. This is because the legislation governing that exemption refers to the use of the taxable commodity for a purpose rather than by a person.

CHP

Where a CHP is operated by a third party on behalf of a principal and the third party purchases the input fuel, he may give the supplier a certificate declaring entitlement to CCL relief. This is because the legislation governing the exemption for input fuels used in a CHP refers to a supply to a person who intends to cause the commodity to be used in a fully exempt or partly exempt CHP.

However, from 1 April 2013, the CPS rates of CCL apply to taxable commodities (other than electricity) that are used in a generating station with a generating capacity that exceeds 2MW. The operator of the CHP station is the person responsible for accounting for the CPS rates of CCL to HMRC.

The liability of supplies used in electricity generation is explained in more detail in Notice CCL1/6 A guide to the carbon price floor.

Persons entering climate change agreements (CCA)

Where there is a single agreement covering an entire site (i.e. the site and facility boundaries coincide) a landlord can give his energy supplier a PP11 CCL Supplier Certificate on behalf of the tenants as well as himself where:

(a) all occupants of the site/facility are entitled to pay the reduced rate of CCL and have no entitlement to any other reliefs, or

(b) the landlord is entitled to receive the CCL exemptions for supplies for non-fuel use or for use in metal recycling processes in addition to the reduced rate, but the tenants are only eligible for the reduced rate.

Since the landlord’s PP11 CCL Supplier Certificate will cover both his own and his tenants’ energy consumption he will be held responsible for any underpaid tax should the certificate prove to be incorrect.

Similar arrangements will apply where there are two or more operators on a site and energy is supplied to one of the operators who in turn supplies to the others.

Where there are separate facilities on different parts of a site, and the facilities have separate agreements, the landlord can give the supplier a PP11 CCL Supplier Certificate on behalf of the tenants as well as himself, provided both the landlord’s and tenants’ premises are facilities covered by agreements and one of the criteria at a) or b) above is met.

6.11.3 When may a landlord not give a PP11 CCL Supplier Certificate on behalf of his tenants?

The landlord may not give a PP11 CCL Supplier Certificate on behalf of tenants who are entitled to receive the exemptions for supplies for non-fuel use or for use in mineralogical or metallurgical processes because these exemptions apply only to the person to whom the supply is made. Where the utility supplies a landlord who then makes an onward supply to the final consumer, this requirement is not met.

6.11.4 Other possible solutions where tenants receive supplies via a landlord and not direct from a utility

The following are examples only. Businesses in a landlord/tenant relationship or with similar arrangements must determine which of these solutions, if any, are suitable for them.

a) The tenant could obtain a dedicated supply direct from a utility. Although this will not always be physically possible it is the ideal solution as the final consumer will himself be able to give the supplier a PP11 CCL Supplier Certificate and obtain relief for his own use, or

b) A landlord may apply to us for 'directed utility' status. If we accept an application and direct that a landlord is to be treated as a utility for CCL purposes, supplies to him from a licensed utility will be outside the scope of CCL. As a directed utility the landlord will have to fulfil certain obligations including registering with us, accounting for CCL when taxable commodities are sold on, and obtaining PP11 CCL Supplier Certificates from customers to evidence their relief entitlement.

Where taxable commodities are used by the directed utility himself, this will be a self-supply on which he will need to account for CCL. If the directed utility is entitled to claim relief on such self-supplies, he will in effect need to claim from relief from himself, and should follow the PP10 Supporting Analysis and PP11 CCL Supplier Certificate process (see section 6.1 and 6.2).

Information on utility directions is contained within our Notice CCL1/1 Registering for climate change levy.

6.12 Change of supplier

Where you decide to change supplier, any PP11 CCL Supplier Certificate delivered to the earlier supplier ceases to have effect. You must provide the new supplier with a certificate in order to obtain any CCL relief due.

However, should your supplier change other than at your behest, providing your PP11 CCL Supplier Certificate has been transferred to your new supplier, continuity of that certificate is retained.

6.13 What happens if I change arrangements with my supplier so that all my electricity is supplied through a renewable contract?

If any of your previous supplies of electricity were subject to a claim for relief, you will need to provide your electricity supplier with a new PP11 CCL Supplier Certificate showing a 0 per cent relief entitlement. In addition, you must review your previous certified entitlement in accordance with the guidance in section 6.

The exemptions for supplies of renewable and CHP source electricity are not claimed through a supplier certificate. Your electricity supplier should automatically treat such supplies as CCL exempt.

6.14 Must wholesale suppliers of LPG and solid fuels obtain PP11 CCL Supplier Certificates from their customers?

We have agreed with the trade bodies representing LPG and solid fuel wholesale suppliers that the taxable commodities supplied to their customers for onward re-sale can be certified in a less formal way. If you are in that situation you should contact us for further guidance on what information needs to be sent to HMRC.

6.15 Other situations

The principles set out in section 6 cover the most common situations and especially those where a business's energy consumption does not change significantly from year to year. However, general guidance cannot cover every situation. If any other situation arises that is not covered by paragraphs 6.1 to 6.13 you should contact us and we will work with you to resolve it.

7. PP10 CCL Supporting Analysis

Form PP10 CCL Supporting Analysis

8. PP11 CCL Supplier Certificate

Form PP11 CCL Supplier Certificate

9. Examples of production use qualifying for exemption

9.1 Uses covered by the exemptions set out at paragraphs 3.4 to 3.6

All taxable commodities used on production premises are exempt from the main rates of CCL unless they are clearly not necessary for, or directly related to, the production process.

Taxable commodities used by producers at remote sites may also be exempt if there is a strong link with the production process.

Examples of exempt and non-exempt uses are given in the tables below. However, if the quantities supplied do not exceed the de minimis thresholds set out at paragraph 2.5, there is no liability to the main rates of CCL.

9.1.1 Production sites: exempt uses

Production site


Production site


Canteen


Switch rooms


Car park lighting


Pumps


General office lighting and heating


Control room


Toilets


Generation start up


Stores (including record archives)


Cranes/lifting equipment


Weighbridge


Workshop


Conveyor belts


Tunnel lighting


Crushers


Production area lighting


Extraction equipment


Compressors


Environmental protection equipment


Perimeter lighting


Reception heating and lighting


Alarm systems


Staff rest room


Shower rooms


Medical centre


Laundry rooms


Fire station


Laboratories


9.1.2 Production sites: Non-exempt uses

Production site


HQ administration facilities


Call centres


Visitor centres


9.1.3 Sites remote from production

Exempt uses


Non-exempt uses


Production/transport of oil and gas (to the point of the primary or pipeline distribution terminal*)


Road tanker delivery


Production/transport/bottling of LPG Production/transport of AVTUR to the point of loading into an aircraft


Wholesale/retail


Procurement of production equipment by producer


Commercial/contractual


Production technical support provided by the producer


Legal


Emergency response units (for example, for oil platforms provided by the producer)


Tax


Oil field operations support/logistics by the producer


IT equipment/support


*Primary distribution terminals are those receiving supplies direct from a refinery.

10. Uses of taxable commodities that are to be taken as not being used for fuel purposes

The following processes using taxable commodities are exempt from the main rates of CCL.

10.1 Wholly non-fuel uses

1. Electricity in electrolysis for the production of:

  • flourine
  • chloroalkali (chlorine, caustic soda and caustic potash)
  • hydrogen peroxide, persulphates, chlorates and peroxyorganic acids by electro-oxidation
  • aluminium
  • copper
  • basic materials directly from an ore or other compound (electrowinning), and
  • advanced chemicals from other more basic chemicals.

2. Electricity in the following types of electrolysis:

  • electro-organic synthesis of fine organics and intermediates such as adiponitrile
  • gold and silver electrolysis, and the electrolytic dissolution of platinum group metal alloys and alkali earth metals such as sodium, potassium, lithium and calcium
  • to purify materials (as distinct from electrowinning)
  • in refining tin or copper from impure metals or ingots, and
  • involving sodium chlorate, potassium permanganate, potassium dichromate, manganese dioxide, cuprous oxide, sorbitol, fatty alcohols.

3. Electricity in battery formation

4. Natural gas as feedstock to produce hydrogen and for hydrogenation reactions

5. Natural gas in the production of hydrogen and carbon monoxide for the reduction and subsequent purification of nickel

6. Natural gas as a feedstock in producing acetic acid and acetic anhydride by a partial oxidation process

7. Natural gas to provide carbon in producing carbon-carbon composites

8. Natural gas in manufacturing sodium cyanide

9. Natural gas and propane in steam reformers to produce a mixture of hydrogen and carbon monoxide in the production of:

  • fertilisers
  • OXO (Oxonation) chemicals - detergent and plasticiser alcohols
  • phosgene
  • ammonia
  • higher alcohols, synthetic fuels, plastics precursors, and
  • methanol methyl tertiary butyl ether, formaldehyde, formic acid, acetic acid, methyl amines, single cell proteins.

10. Methane as a feedstock in producing higher paraffins and their derivatives

11. Liquefied petroleum gas as a propellant in aerosols

12. Liquefied petroleum gas as feedstock in the cracking process to produce lower olefins

13. Lower olefins as feedstock for conversion by chemical processes

14. Propylene as feedstock in the manufacture of propan-2-ol (iso-propyl alcohol), polypropylene and cumene

15. Petroleum coke in the manufacture of carbon and graphite electrodes

16. Coke as a resistor in electro-thermal furnaces

17. Coke in the manufacture of titanium dioxide by the chloride process.

10.2 Mixed uses

These mixed uses are the only ones that involve relevant commodities being used partly as fuel and partly not, but which are specified as being uses that are not to be taken as being uses of those commodities as fuel.

1 Coke as a source of carbon dioxide in the Ammonia Soda process for producing soda ash

2. Coal, coke and anthracite used for its structural properties as a bedding agent in the extraction of gas from waste material

3. Natural gas as a reductant in emission control systems, for example, in the reduction of oxides of nitrogen

4. Natural gas in the manufacture of methocrylate monomers and polymers including that natural gas used for emission control which is an integral and essential part of the manufacturing process

5. Natural gas as feedstock in the production of carbon black

6. Liquid propane in the production of ethylene where heat is provided either by combustion of the waste products or from another source

7. Commodities in the reduction of chlorine

A number of mixed use exemptions from CCL will be discontinued from 1 April 2014, since they are metallurgical processes and will qualify for the new metallurgical exemption (see section 3.14) from that date. A list of the discontinued mixed uses is provided in the Annex of this notice.

Further help and advice

If you need general advice or more copies of HMRC notices, please phone our Helpline on 0300 200 3700. You can call between 8.00 am and 6.00 pm, Monday to Friday.

If you have hearing difficulties, please phone the Textphone service on 0300 200 3719.

If you would like to speak to someone in Welsh please phone 0300 200 3705, between 8.00 am and 6.00 pm, Monday to Friday.

All calls are charged at the local rate when dialling from a UK landline. Charges may differ for mobile phones.

If you would like to contact us by email, you can do so at the following link:

Emailing HM Revenue & Customs (HMRC) with your excise enquiry

If you would like copies of any of our material in Welsh, please write to the address given in Section 11 of this notice.

Your rights and obligations

Your Charter explains what you can expect from us and what we expect from you. For more information, go to www.hmrc.gov.uk/charter

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:

HM Revenue & Customs
Environmental Taxes Team
3rd Floor West, Ralli Quays
3 Stanley Street
Salford
M60 9LA

Please note this address is not for general enquiries.

For your general enquiries please phone our Helpline on 0300 200 3700.

Putting things right

If you are unhappy with our service, please contact the person or office you have been dealing with. They will try to put things right. If you are still unhappy, they will tell you how to complain.

If you want to know more about making a complaint go to, www.hmrc.gov.uk and under quick links, select Complaints and appeals

How we use your information

HM Revenue & Customs is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:

  • check the accuracy of information
  • prevent or detect crime
  • protect public funds.

We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HM Revenue & Customs unless the law permits us to do so.

For more information, go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.

Annex

Guidance on the exemptions for use in mineralogical and metallurgical processes

1. Introduction

This Annex sets out the scope of the exemptions referred to above in section 3.14 of this notice.

Processes that qualify for the mineralogical exemption are set out in section 2 of this Annex.

Processes that qualify for the metallurgical exemption are set out in section 3 of this Annex.

Section 4 of this Annex provides an indicative list of energy uses accepted as falling within the scope of the exemptions where incurred in the course of a qualifying process.

Where energy costs incurred at a site relate to both exempt and non-exempt processes, the energy usage must be apportioned on a fair and reasonable basis.

Details of how to claim the exemptions are set out above in section 6 of this notice.

2. Mineralogical processes

2.1 Manufacture of flat glass

This includes the manufacture of flat glass, including wired, coloured or tinted flat glass.

2.2 Shaping and processing of flat glass

This includes the manufacture of:

  • toughened or laminated flat glass
  • coated glass
  • glass mirrors
  • multiple-walled insulating units of glass

2.3 Manufacture of hollow glass

This includes the manufacture of:

  • bottles and other containers of glass or crystal
  • drinking glasses and other domestic glass or crystal articles

This excludes the:

  • reprocessing of post consumer glass
  • bottling of liquids
  • retail sale of glassware

2.4 Manufacture of glass fibres

This includes the manufacture of glass fibres, including glass wool and non-woven products thereof.

This excludes the manufacture of:

  • woven fabrics of glass yarn
  • fibre optic cable for data transmission or live transmission of images

2.5 Manufacture and processing of other glass, including technical glassware

This includes the manufacture of:

  • laboratory, hygienic or pharmaceutical glassware
  • clock or watch glasses, optical glass and optical elements not optically worked
  • glassware used in imitation jewellery
  • glass insulators and glass insulating fittings
  • glass envelopes for lamps
  • glass figurines
  • glass paving blocks
  • glass in rods or tubes
  • ballotini and glass beads
  • other blown, drawn or moulded glass products

This excludes the manufacture of optical elements optically worked.

2.6 Manufacture of refractory products

This includes the manufacture of:

  • refractory mortars, concretes etc.
  • refractory ceramic goods:

    - heat-insulating ceramic goods of siliceous fossil meals

    - refractory bricks, blocks and tiles etc.

    - retorts, crucibles, muffles, nozzles, tubes, pipes etc.
  • refractory articles containing magnesite, dolomite or chromite

This excludes the mining of refractory clays.

2.7 Manufacture of ceramic tiles and flags

This includes the manufacture of:

  • non-refractory ceramic hearth or wall tiles, mosaic cubes etc
  • non-refractory ceramic flags and paving

This excludes the manufacture of artificial stone (e.g. cultured marble).

2.8 Manufacture of bricks, tiles and construction products, in baked clay

This includes the manufacture of:

  • structural non-refractory clay building materials:
  • ceramic bricks, roofing tiles, chimney pots, pipes, conduits etc
  • flooring blocks in baked clay

This excludes the mining of clay and shale.

2.9 Manufacture of ceramic household and ornamental articles

This includes the manufacture of:

  • ceramic tableware and other domestic or toilet articles
  • statuettes and other ornamental ceramic articles

This excludes the retail sale of ceramic household and ornamental articles at the place of production.

2.10 Manufacture of ceramic sanitary fixtures

This includes the manufacture of:

  • ceramic sanitary fixtures, e.g. sinks, baths, bidets, water closet pans etc
  • other ceramic fixtures

2.11 Manufacture of ceramic insulators and insulating fittings

This includes the manufacture of electrical insulators and insulating fittings of ceramics.

2.12 Manufacture of other technical ceramic products

This includes the manufacture of:

  • ceramic and ferrite magnets
  • ceramic laboratory, chemical and industrial products

This excludes the manufacture of artificial stone (e.g. cultured marble).

2.13 Manufacture of other ceramic products

This includes the manufacture of:

  • ceramic pots, jars and similar articles of a kind used for conveyance or packing of goods
  • prepared bodies for use in ceramic manufacture
  • calcined minerals for use in ceramic manufacture
  • ceramic products not elsewhere classified, subject to confirmation from HMRC

2.14 Manufacture of cement

This includes the:

  • manufacture of clinkers and hydraulic cements, including Portland, aluminous cement, slag cement and superphosphate cements
  • grinding and preparation of raw meal kiln feed for cement clinker

This excludes the:

  • quarrying, crushing and breaking of limestone
  • manufacture of cements used in dentistry

2.15 Manufacture of lime and plaster

This includes the manufacture of:

  • quicklime, slaked lime and hydraulic lime
  • precipitated calcium carbonate
  • plasters of calcined gypsum or calcined sulphate
  • calcined dolomite

This excludes the:

  • quarrying and crushing of limestone, chalk or dolomite up until the point at which the feedstone is prepared for direct kiln input
  • mining of gypsum and anhydrite
  • mining of chalk and uncalcined dolomite

2.16 Manufacture of concrete products for construction purposes

This includes the manufacture of:

  • precast concrete, cement or artificial stone articles for use in construction:

    - tiles, flagstones, bricks, blocks, boards, sheets, panels, pipes, posts etc
  • prefabricated structural components for building or civil engineering of cement, concrete or artificial stone

2.17 Manufacture of plaster products for construction purposes

This includes the manufacture of plaster articles for use in construction:

  • boards, sheets, panels etc

2.18 Manufacture of ready-mixed concrete

This includes the manufacture of ready-mix and dry-mix concrete, mortar and screeds.

2.19 Manufacture of mortars

This includes the manufacture of powdered mortars.

2.20 Manufacture of fibre cement

This includes the manufacture of:

  • building materials of vegetable substances (wood wool, straw, reeds, rushes) agglomerated with cement, plaster or other mineral binder
  • articles of asbestos-cement or cellulose fibre-cement or the like:

    - corrugated sheets, other sheets, panels, tiles, tubes, pipes, reservoirs, troughs, basins, sinks, jars, furniture, window frames etc

2.21 Manufacture of other articles of concrete, plaster and cement

This includes the manufacture of other articles of concrete, plaster, cement or artificial stone:

  • statuary, furniture, bas- and haut-reliefs, vases, flowerpots etc

2.22 Cutting, shaping and finishing of stone

This includes the:

  • cutting, shaping and finishing of stone for use in construction, in cemeteries, on roads, as roofing etc
  • manufacture of stone furniture

This excludes quarrying or mining operations e.g. production of rough cut stone, production of millstones, abrasive stones and similar products.

2.23 Production of abrasive products

This includes the manufacture of millstones, sharpening or polishing stones and natural or artificial abrasive products on a support, including abrasive products on a soft base (e.g. sandpaper).

2.24 Manufacture of other non-metallic mineral products

This includes the manufacture of:

  • friction material and unmounted articles thereof with a base of mineral substances or of cellulose
  • mineral insulating materials:

    - slag wool, rock wool and similar mineral wools; exfoliated vermiculite, expanded clays and similar heat- insulating, sound-insulating or sound-absorbing materials
  • articles of diverse mineral substances:

    - worked mica and articles of mica, of peat, of graphite (other than electrical articles) etc
  • articles of asphalt or similar material, e.g. asphalt-based adhesives, coal tar pitch etc
  • roadstone coating (asphalt)
  • carbon and graphite fibre and products including electrodes
  • artificial corundum

3. Metallurgical Processes

3.1 Manufacture of basic iron and steel and of ferro-alloys

This includes the:

  • production of iron ore sinter
  • preheating and melting of scrap iron or steel
  • operation of blast furnaces, steel converters, rolling and finishing mills
  • production of pig iron and spiegeleisen in pigs, blocks or other primary forms of production of ferro-alloys
  • production of ferrous products by direct reduction of iron and other spongy ferrous products
  • production of iron of exceptional purity by electrolysis or other chemical processes
  • remelting of scrap ingots of iron or steel
  • production of granular iron and iron powder
  • production of steel in ingots or other primary forms production of semi-finished products of steel manufacture of hot-rolled and cold-rolled flat-rolled products of steel
  • manufacture of hot-rolled bars and rods of steel manufacture of hot-rolled open sections of steel
  • manufacture of sheet piling of steel and welded open sections of steel
  • manufacture of railway track materials (unassembled rails) of steel

This excludes the:

  • mining, benefication and agglomeration of iron ores
  • breaking up of end of life goods

3.2 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel

This includes the manufacture of:

  • seamless tubes and pipes of circular or non-circular cross section and of blanks of circular cross section, for further processing, by hot rolling, hot extrusion or by other hot processes of an intermediate product which can be a bar or a billet obtained by hot rolling or continuous casting
  • precision and non-precision seamless tubes and pipes from hot rolled or hot extruded blanks by further processing, by cold-drawing or cold-rolling of tubes and pipes of circular cross section and by cold drawing only for tubes and pipes of non circular cross section and hollow profiles
  • welded tubes and pipes of an external diameter exceeding 406.4 mm, cold formed from hot rolled flat products and longitudinally or spirally welded
  • welded tubes and pipes of an external diameter of 406.4 mm or less of circular cross section by continuous cold or hot forming of hot or cold rolled flat products and longitudinally or spirally welded and of non-circular cross section by hot or cold forming into shape from hot or cold rolled strip longitudinally welded
  • welded precision tubes and pipes of an external diameter of 406.4 mm or less by hot or cold forming of hot or cold rolled strip and longitudinally welded delivered as welded or further processed, by cold drawing or cold rolling or cold formed into shape for tube and pipe of non-circular cross section
  • flat flanges and flanges with forged collars by processing of hot rolled flat products of steel
  • butt-welding fittings, such as elbows and reductions, by forging of hot rolled seamless tubes of steel
  • threaded and other tube or pipe fittings of steel

3.3 Manufacture of other products of first processing of steel

This includes the manufacture of:

  • steel bars and solid sections of steel by cold drawing, grinding or turning
  • coated or uncoated flat rolled steel products in coils or in straight lengths of a width less than 600 mm by cold re-rolling of hot-rolled flat products or of steel rod
  • open sections by progressive cold forming on a roll mill or folding on a press of flatrolled products of steel
  • cold-formed or cold-folded, ribbed sheets and sandwich panels
  • drawn steel wire, by cold drawing of steel wire rod

This excludes the manufacture of derived wire products.

3.4 Precious metals production

This includes the production:

  • and refining of unwrought or wrought precious metals: gold, silver, platinum etc. from ore, scrap, residues and concentrates
  • of precious metal alloys
  • of precious metal semi-products
  • of silver rolled onto base metals
  • of gold rolled onto base metals or silver
  • of platinum and platinum group metals rolled onto gold, silver or base metals

This also includes the manufacture of:

  • wire of these metals by drawing
  • precious metal foil laminates

This excludes the:

  • mining of precious metals
  • breaking up of end of life goods
  • manufacture of precious metal jewellery.

3.5 Aluminium production

This includes the:

  • production of aluminium from alumina
  • production of aluminium from electrolytic refining of aluminium waste and scrap
  • production of aluminium alloys
  • semi-manufacturing of aluminium
  • manufacture of wire of these metals by drawing
  • production of aluminium oxide (alumina)
  • production of aluminium wrapping foil
  • manufacture of aluminium foil laminates made from aluminium foil as primary component

This excludes the:

  • breaking up of end of life goods

3.6 Lead, zinc, tin and copper production

This includes the:

  • production of lead, zinc, tin and copper from ores
  • production of lead, zinc and tin from electrolytic refining of lead, zinc, tin and copper waste and scrap
  • production of lead, zinc, tin and copper alloys
  • semi-manufacturing of lead, zinc, tin and copper
  • manufacture of wire of these metals by drawing
  • production of tin foil
  • manufacture of copper fuse wire or strip

This excludes the:

  • mining and preparation of ores of lead, zinc, tin and copper
  • breaking up of end of life goods

3.7 Other non-ferrous metal production

This includes the:

  • production of chrome, manganese, nickel etc. from ores or oxides
  • production of chrome, manganese, nickel etc. from electrolytic and aluminothermic refining of chrome, manganese, nickel etc., waste and scrap
  • production of alloys of chrome, manganese, nickel etc.
  • semi-manufacturing of chrome, manganese, nickel etc.
  • production of mattes of nickel
  • manufacture of wire of these metals by drawing
  • production of metallised carbon products

This excludes the:

  • mining and preparation of ores of chrome, manganese, nickel etc.
  • breaking up of end of life goods

3.8 Casting of iron and steel

This includes the:

  • casting of semi-finished iron and steel products
  • casting of grey iron castings
  • casting of spheroidal graphite iron castings
  • casting of malleable cast-iron products
  • manufacture of seamless tubes and pipes of steel by centrifugal casting
  • manufacture of tubes, pipes and hollow profiles and of tube or pipe fittings of cast-iron or cast-steel

This excludes the fabrication of finished goods, including any post-production assembly or machining processes.

3.9 Casting of light metals

This includes the casting of:

  • semi-finished products of aluminium, magnesium, titanium, zinc etc
  • light metal castings

This excludes the fabrication of finished goods, including any post-production assembly or machining processes.

3.10 Casting of other non-ferrous metals

This includes the:

  • casting of heavy metal castings
  • casting of precious metal castings
  • die-casting of non-ferrous metal castings

This excludes the fabrication of finished goods, including any post-production assembly or machining processes.

3.11 Forging, pressing, stamping and roll-forming of metal

This includes the forging, pressing, stamping and roll-forming of metal.

This excludes the fabrication of finished goods, including any post-production assembly or machining processes.

3.12 Powder metallurgy

This includes the production of metal powders and the production of metal objects directly from metal powders by heat treatment (sintering) or under pressure.

3.13 Treatment and coating of metals

This includes the:

  • hot dipping (galvanising), electroplating and anodising of metals
  • heat treatment of metals
  • deburring, sandblasting, tumbling and cleaning of metals, when conducted in relation to a metallurgical process

This excludes:

  • colouring, engraving of metals
  • non-metallic coating of metals:

    - plasticising, enamelling, lacquering etc.
  • hardening, buffing of metals
  • activities of farriers
  • printing onto metals
  • metal coating of plastics
  • "while-you-wait" engraving services
  • boring, turning, milling, eroding, planing, lapping, broaching, levelling, sawing, grinding, sharpening, polishing, welding, splicing etc. of metalwork pieces
  • cutting of and writing on metals by means of laser beams

4. Qualifying Energy Uses

4.1 Handling

This includes the:

  • receipt, quality control and storage of raw materials and other inputs
  • handling of intermediary products
  • packaging, warehousing and despatch of finished products
  • on site conveyance of delivered materials, intermediary products and finished products

4.2 Factory services

This includes:

  • laboratory services
  • quality control at all stages of manufacture
  • control rooms
  • engineering services
  • heating and cooling systems
  • compression systems
  • air and water distribution systems
  • waste treatment and abatement

4.3 On site-facilities

This includes:

  • administration
  • staff facilities
  • medical rooms
  • security
  • staff training
  • design and development
  • heating
  • inside and outside lighting

5. Discontinued Mixed Use Exemptions

The mixed use exemptions set out below will be discontinued from 1 April 2014 since they are metallurgical processes and will therefore qualify for the new metallurgical exemption from that date. On the PP10 Supporting Analysis form, the use of taxable commodities associated with these processes should be included in the mineralogical and metallurgical processes box rather than in the mixed uses box.

  • coal, coke and natural gas as chemical reductants for ironmaking, for example, in blast furnaces
  • coal, coke and natural gas as chemical reductants in the blast furnace production of zinc and other non-ferrous metals
  • coal and coke in the recarburising of iron and steel
  • coke breeze in a sinter plant to assist in the agglomeration of iron ore and its subsequent chemical reduction in blast furnaces
  • coke injected into electric arc furnaces to control the chemistry of the steel and the steelmaking slag
  • coke charged to electric arc furnaces to control the oxygen activity of the steel melt
  • coke as a carburiser in iron casting
  • anthracite as a reductant in the smelting of precious metals
  • gas for vacuum reduction in metal powder production and to maintain carbon content in metal during the sintering process
  • gas to maintain or increase the carbon content of metals during heat treatment
  • natural gas as feedstock in a gas generator supplying a reducing atmosphere for the treatment or annealing of metal products
  • commodities in reduction furnaces for the production of lead
  • commodities to form reducing atmospheres, for example, in the refining and manipulation of molten copper to control oxygen levels
  • commodities in ASARCO (American Smelting and Refining Company) shaft furnaces, the deoxidisation of copper swarf and the annealing of copper and copper alloys to provide a reducing atmosphere

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$START-DATA$ title=CCL - reliefs and special treatments for taxable commodities^ summary=This notice provides information in respect of supplies of taxable commodities to which the full rate of levy does not apply, and the certification procedures that must be followed in respect of them.^ doctype=PublicNotice^ date=12-Jun-2014^ author=EP6028831^ $END-DATA$
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