Budget Briefing – 27th October 2021
The Chancellor has delivered the Autumn Budget 2021; please find enclosed details of those policies that may affect our clients:
Budget Policy Overview
Autumn Budget and Spending Review 2021 takes place as the country focuses on recovering from a period of unparalleled global economic uncertainty and challenge to move towards a more promising future.
The Budget sets out how the government will extend its economic support to reflect the cautious easing of social distancing rules and the reopening of the economy in the government’s roadmap.
Support in the Budget reflects the easing of restrictions to enable the private sector to bounce back as quickly as possible.
Energy and Environmental Taxes
Fuel Duty
The government will freeze fuel duty UK-wide in 2022-23. This is the twelfth consecutive year of the freeze, cumulatively saving the average UK car driver £1,900 compared with the pre-2010 escalator.
Climate Change Levy
The main and reduced rates for 2021 to 2022 and the rates for 2022 to 2023 and 2023 to 2024 are as follows:
Climate Change Levy Main Rates
| Taxable Commodity | Rate from 01/04/2021 | Rate from 01/04/2022 | Rate from 01/04/2023 |
|---|---|---|---|
| Electricity (£ per kWh) | 0.00775 | 0.00775 | 0.00775 |
| Natural gas (£ per kWh) | 0.00465 | 0.00568 | 0.00672 |
| LPG (£ per kg) | 0.02175 | 0.02175 | 0.02175 |
Climate Change Reduced Rates
| Taxable Commodity | Rate from 01/04/2021Rate from 01/04/2022 | Rate from 01/04/2023 | |
|---|---|---|---|
| Electricity | 8% | 8% | 8% |
| Natural Gas | 17% | 14% | 12% |
| LPG | 23% | 23% | 23% |
Carbon Price Support (CPS) Rate
The government will continue the freeze on Carbon Price Support rates to maintain a cost of £18 per tonne of carbon dioxide in Great Britain from 2023-24.
Red Diesel
The government has confirmed that it will remove the entitlement to red diesel and rebated biofuels from April 2022, excepting use for agriculture (including horticulture, fish farming and forestry), rail vehicles and for non-commercial heating.
Carbon Capture
To decarbonise industry and power the government is confirming £1 billion for Carbon Capture, Usage and Storage (CCUS). In addition, the government is providing up to £140 million to support hydrogen producers and heavy industry adopting CCUS through the Industrial Decarbonisation and Hydrogen Revenue Support scheme
Energy Innovation
From 2023, the government will introduce exemptions for eligible plant and machinery used in onsite renewable energy generation and storage, and a new 100% relief for eligible heat networks, to support the decarbonisation of buildings.
The UK’s energy and industrial sectors will play a central role in the transition to net zero. Building on the Energy White Paper published in December 2020, the government has announced a new ambition for all of the UK’s electricity to be from low carbon sources by 2035, subject to security of supply.
The Budget invests in key new industries, including reaffirming UK-wide investment of £240 million for the Net Zero Hydrogen Fund and £1 billion for the Carbon Capture Usage & Storage (CCUS) Infrastructure Fund.
In addition, it invests in emerging low carbon technologies to create new jobs across the UK. It confirms funding for the £1 billion Net Zero Innovation Portfolio, as announced in the Ten Point Plan, which is accelerating near-to-market low-carbon technology innovations. The £385 million Advanced Nuclear Fund is developing the next generation of small and advanced modular reactor technologies
From 1 April 2023 until 31 March 2035 targeted business rate exemptions for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible heat networks, to support the decarbonisation of non-domestic buildings.
If you have any questions regarding the Autumn Budget and how it may affect you, please do not hesitate to contact us on 01293 521 350 or at info@2ea.co.uk
