CCL charges and exemptions for businesses

What CCL is and the rates from 1 April 2026

CCL is an environmental tax on taxable electricity, natural gas, liquefied petroleum gas and solid fuels supplied to business and public-sector users. Energy suppliers usually show it as a separate line calculated from the eligible units used during the billing period.

For supplies treated as taking place from 1 April 2026, the main rate is 0.801p per kWh for electricity and 0.801p per kWh for natural gas. LPG is charged at £0.02175 per kg and other taxable commodities at £0.06264 per kg. Use the rate that applied on the supply date, not simply the date the invoice was issued.

• Multiply eligible electricity or gas kWh by 0.801p to sense-check the main-rate charge.
• Separate exempt or excluded consumption before applying the rate.
• Do not assume a renewable tariff is CCL-free; the general renewable electricity exemption ended for electricity generated on or after 1 August 2015.
• Check credit notes and rebills against the rate for the original supply period.

Small supplies can fall below the de minimis limits

Small amounts of fuel and power can be treated as domestic supplies for CCL even when the customer is a business. GOV.UK gives the de minimis limits as electricity below 1,000 kWh a month and piped gas below 4,397 kWh a month at a premises. Separate limits apply to coal, coke and LPG.

This treatment follows the amount supplied, so review each account and billing period rather than relying on the size or legal form of the business. If a supplier charges CCL below the relevant limit, ask it to explain the consumption period and how it tested the threshold.

Domestic, residential and charity non-business use

A supply is excluded from CCL when it is for domestic use or for a charity's non-business activities. Domestic use can include residential accommodation, hospices, care homes, religious houses, self-catering holiday accommodation and qualifying community heating schemes. A charity's commercial activity is not automatically excluded merely because the customer is a charity.

Where one supply serves both qualifying and taxable uses, the percentage matters. If domestic or charity non-business use is at least 60% of total use, the whole supply can be treated as excluded. Below 60%, CCL applies to the non-qualifying portion. The supplier should obtain a certificate stating the qualifying percentage.

• Measure qualifying use using a reasonable, supportable method.
• Provide a separate certificate for each premises or supply where required.
• Update the supplier when the use or qualifying percentage changes.
• Keep calculations, floor areas, sub-meter data or other evidence supporting the split.

Other supplies and processes that may be exempt

HMRC lists exemptions for defined supplies and uses rather than for broad sectors. Examples include certain transport uses, energy used in qualifying mineralogical and metallurgical processes, commodities not used as fuel, some supplies to electricity producers and qualifying combined heat and power schemes, and supplies not consumed in the UK.

The boundary can be technical. A qualifying process does not necessarily exempt every unit used across the site, and ordinary offices, lighting or ancillary activity may need separate treatment. HMRC updated its CCL1/3 notice in March 2026 for changes to the non-fuel use exemption, so use the current notice and map each claimed unit to the qualifying activity.

• Some forms of passenger and freight transport qualify; theme-park and museum transport are examples HMRC excludes.
• Mineralogical and metallurgical relief applies to defined processes and supporting use within the rules.
• CHP relief depends on the scheme and the relevant quality-assurance conditions.
• Non-fuel use and electricity-generation reliefs require the specific statutory conditions to be met.

A Climate Change Agreement gives a reduced rate, not a full exemption

An eligible energy-intensive business with a Climate Change Agreement can pay a percentage of the main CCL rate while it meets the scheme conditions. From 1 April 2026, the reduced rate is 8% of the main rate for electricity, 11% for natural gas, 23% for LPG and 11% for other taxable commodities.

A CCA discount is different from a process exemption. Confirm which facilities, target units and fuels are covered, then make sure the supplier has the current certification. Consumption outside the eligible facility or activity may remain chargeable at the main rate.

VAT relief and CCL relief are connected but not identical

Business fuel and power is normally standard-rated for VAT. Qualifying small supplies, domestic use and charity non-business use can receive the reduced rate, with the same 60% rule used for mixed qualifying use. If less than 60% qualifies, the supplier apportions the qualifying and non-qualifying parts.

VAT rates can change independently of CCL. From 1 October 2026 to 31 March 2027, qualifying electricity supplies in Great Britain are temporarily zero-rated for VAT, while qualifying electricity in Northern Ireland and other qualifying domestic fuel remain at 5%. A VAT change does not by itself create a new CCL exemption.

How to claim CCL relief or correct a bill

Give the supplier the certificate or declaration required for the relief. Claims commonly use a VAT certificate for domestic or charity non-business use and HMRC forms PP10 and PP11 for CCL relief calculations and supplier certification. The documents should identify the customer, premises, supply, qualifying use, percentage claimed and effective date.

Keep the evidence used to calculate the relief and review it when operations change. For a retrospective correction, identify the affected invoices and supply periods, show how the qualifying percentage was calculated and ask the supplier whether it will amend the bills or whether a direct HMRC claim procedure is needed.

• Record every MPAN, MPRN or other relevant account covered by the claim.
• State the qualifying percentage and the date it begins.
• Keep signed certificates, calculations and supplier acknowledgements together.
• Recheck the claim after a change of use, meter, tenant, legal entity or CCA coverage.

Audit an unexpected CCL charge

Recalculate the charge from eligible consumption and the rate for the supply date. Compare it with previous bills, meter data and certificates already supplied. Ask the supplier which units it treated as taxable, which relief percentage it used and whether the certificate was active for the full period.

Tax treatment depends on facts and evidence. Use current HMRC guidance for the invoice period and obtain tax advice where a process boundary, mixed-use calculation or retrospective claim is material.