Taxation (Energy and Vehicles) Act 2026

1 Increase in rate of electricity generator levy

(1) In section 279 of the Finance (No. 2) Act 2023 (charge on exceptional generation receipts), in subsection (1), for “45%” substitute “55%”.

(2) The amendment made by subsection (1) has effect for qualifying periods beginning on or after 1 July 2026.

(3) In the case of a qualifying period beginning before 1 July 2026 and ending on or after that date (a “straddling period”), section 279(1) of the Finance ​(No. 2) Act 2023 applies as if, instead of the amount of the charge being equal to 45% of the undertaking’s exceptional generation receipts for the straddling period, the amount of the charge is the sum of—

(a) 45% of so much of the exceptional generation receipts for the straddling period as is attributable to a time before 1 July 2026, and

(b) 55% of so much of the exceptional generation receipts for the straddling period as is attributable to a time on or after 1 July 2026.

(4) For the purposes of subsection (3), exceptional generation receipts for a straddling period are to be attributed to a time before, or on or after, 1 July 2026 on a time basis according to the respective lengths of—

(a) the period beginning with the beginning of the straddling period and ending with 30 June 2026, and

(b) the period beginning with 1 July 2026 and ending with the end of the straddling period.

(5) If—

(a) electricity generator levy is chargeable on a company for a straddling period, and

(b) under the Instalment Payment Regulations one or more instalment payments in respect of the total liability of the company for the straddling period are treated as becoming due and payable before the day on which this Act is passed (“pre-commencement instalments”),

the additional amount of levy chargeable for the straddling period as a result of subsection (3) is to be ignored for the purposes of determining the amount of any pre-commencement instalment.

(6) The first instalment in respect of that liability which is treated as becoming due and payable on or after the day on which this Act is passed is to be increased by the following amount, namely the difference between—

(a) the aggregate amount of the pre-commencement instalments determined in accordance with subsection (5), and

(b) the aggregate amount of those instalments determined ignoring that subsection.

(7) In the Instalment Payment Regulations—

(a) in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13, references to those Regulations are to be read as including a reference to subsections (5) and (6) (and in regulation 7(2) “the regulation in question”, and in regulation 8(2) “that regulation”, are to be read accordingly), and

(b) in regulation 9(3), the reference to those Regulations is to be read as including a reference to those subsections.

(8) In this section “the Instalment Payment Regulations” means the Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175).