Summer Budget 2015
The Chancellor has delivered the Summer Budget 2015; please read on for details of those policies that may affect our clients:
Summer Budget Policy Overview
The government will continue to promote the low carbon investment and innovation needed to support global action on climate change, focussing on the best value for money policies to keep costs down for consumers.
The government will push for a global climate deal later this year that keeps the goal of limiting global warming to 2 degrees firmly within reach.
The government also aims to develop a simple, fair and more efficient energy environment for business that minimises administrative burdens and improves incentives for business to invest and grow. The government will review the business energy efficiency tax landscape and consider approaches to simplify and improve the effectiveness of the regime.
This Budget also announces the removal of the Climate Change Levy exemption for renewable electricity. This change will correct an imbalance in the tax system by preventing taxpayers’ money benefitting renewable electricity generated overseas, and by helping ensure support for low carbon generation provides better value for money for UK taxpayers.
Venture Capital Schemes: Renewable Energy
The government will continue to monitor investments in community energy organisations benefiting from subsidies for the generation of renewable energy to ensure that support for community energy through the venture capital schemes provides good value for money for the taxpayer and is not subject to misuse.
Environment & Energy Taxes
The government will remove the Climate Change Levy exemption for renewably sourced electricity from the 1st August 2015. There will be a transitional period for suppliers, from 1st August 2015, to claim the CCL exemption on any renewable electricity that was generated before that date. The government will discuss the details of this transitional period with stakeholders over the summer and autumn, to determine an appropriate length for it.
Environmental Taxes
The government will continue to use the tax system to encourage positive environmental outcomes where tax is an effective instrument to do so.
The government will not extend the Coalition government’s commitment to increasing the proportion of revenue from environmental taxes to this Parliament, as such a target does not always reflect the success of government policy in achieving environmental outcomes.
Business Energy Tax Reform
The government will review the business energy efficiency tax landscape and consider approaches to simplify and improve the effectiveness of the regime. The review will consider the Climate Change Levy (CCL), Carbon Reduction Commitment energy efficiency scheme and their interaction with other business energy efficiency policies and regulations. A consultation will be launched in the autumn.
Green Investment Bank
The government is exploring options to move the Green Investment Bank into private ownership. This will ensure the future sustainability of the bank as well as increasing its impact by freeing it from the constraints of state aid and competition for public funding.
