The Climate Change Levy (General) Regulations 2001

Regulation 38

SCHEDULE CERTIFICATION AND MANNER OF PAYMENT OF CCL DUE IN THE CASE OF EXCLUDED, EXEMPT, HALF-RATE OR REDUCED-RATE SUPPLIES

1. Paragraphs 1–4. Basic rules.

2. Paragraph 5. Compulsory updates and corrections to CCL due.

3. Paragraphs 6–11. Tax credit for recipient.

4. Paragraphs 12–15. Miscellaneous: voluntary updates, change of supplier, delivery of information, record keeping.

Basic rules

1.  This Schedule applies in relation to a supply to which regulation 34, 35 or 36 applies or that otherwise includes a reduced-rate part.

2.  CCL shall not be due on the percentage of the supply properly determined in accordance with the following formula (the “CCL relief formula”):

Notes

P

=

the percentage of the supply on which CCL is not due (the “CCL relief percentage”) which must not be less than 0 per cent. nor more than 100 per cent.

Q

=

the quantity of the taxable commodity supplied.

In the case of electricity:

(a) Q includes any of that quantity that falls within the exclusion from CCL provided for by paragraph 9(2)(f)—community heating arrangements;

(b) Q does not include any of that quantity, apart from as described in (a) above, that falls within the exclusion from CCL provided for by paragraph 8—domestic or charity use;

(c) Q does not include any of that quantity that falls within the exemption from CCL provided for by or under paragraph 16 or 19—electricity up to specified limit from partly exempt combined heat power station or electricity from renewable source.

In all cases, Q does not include any quantity referable to exclusions under paragraph 8 (domestic or charity use) but does include any such quantity referable to the exclusion provided for by paragraphs 8 and 9(2)(f) (community heating arrangements).

C

=

the quantity of the taxable commodity referable to the sum of every relevant excluded part (paragraphs 8 and 9(2)(f)—community heating arrangements).

M

=

the quantity of the taxable commodity referable to the sum of every exempt part:

(a)

paragraph 11—onward supplies and exports;

(b)

paragraph 12—transport;

(c)

paragraph 13—commodity producers;

(d)

paragraph 14—electricity producers;

(e)

paragraph 15—combined heat and power stations;

(f)

paragraph 18—non-fuel use;

(g)

paragraph 21—regulation 41 of these Regulations (or other relevant regulations made under that paragraph of the Act to avoid double charges to CCL).

0.5H

=

50% of the quantity of the taxable commodity referable to the sum of every half-rate part (paragraph 43—horticultural producers).

0.8R

=

80% of the quantity of the taxable commodity referable to the sum of every reduced-rate part (paragraph 44—climate change agreement).

The paragraph numbers referred to in these notes refer to the relevant paragraphs in Schedule 6 to the Finance Act 2000.

3.—(1) Any supplier certificate delivered by the recipient shall represent to the best of the recipient’s judgment any information required by regulation 34(2) (exclusions and exemptions), regulation 35(2) (half-rates), regulation 36(2) (certain reduced-rates) or regulation 37(3) (combinations).

(2) A supplier certificate may relate to more than one supply (subject to Part III of these Regulations and the other provisions of this Schedule).

(3) Accordingly, if it relates to more than one supply, a supplier certificate shall provide a recipient’s relief percentage based on—

(a) the likely number of supplies to which it will relate,

(b) the likely quantity of the taxable commodity in question that will be supplied to him by the supplier if those supplies are made, and

(c) any other relevant circumstances.

4.  The supplier shall apply the CCL relief percentage to any supply he makes to which the supplier certificate relates and may, for this purpose, rely on the percentage (the “recipient’s relief percentage”) provided by the recipient in accordance with regulation 38(2).

Compulsory updates and corrections to CCL due

5.—(1) The recipient shall review the correctness of the supplier certificate no later than the earlier of—

(a) the sixtieth day after the expiry of one year starting from its implementation date, or

(b) the sixtieth day after the recipient has burned (or, in the case of electricity, consumed) the last of the taxable commodity supplied to which the supplier certificate relates.

(2) That correctness shall be reviewed in relation to—

(a) (if sub-paragraph (1)(a) applies), the elapsed period of one year starting with the implementation date (and this period is referred to in sub-paragraph (3) as the “review period”), or

(b) (if sub-paragraph (1)(b) applies), the CCL relief percentage calculated on the basis of actual events.

(3) If—

(a) the review demonstrates that the supplier certificate was correct, and

(b) that certificate also relates to supplies made or to be made by the supplier after the end of the review period,

that supplier certificate shall be regarded for the purposes of Part III of these Regulations and this Schedule as having as its implementation date the anniversary of its original implementation date (and sub-paragraphs (1) and (2) shall apply accordingly).

(4) Sub-paragraphs (5) to (10) apply if the review demonstrates that the supplier certificate was incorrect.

(5) If the supplier certificate was incorrect because the CCL relief percentage applied was too low, the recipient may act in accordance with paragraphs 6 to 10 (provision for tax credits) (subject to paragraph 11).

(6) Sub-paragraph (9) applies if—

(a) the certificate was incorrect because the CCL relief percentage applied was too high, but

(b) the recipient—

(i) delivers an updated supplier certificate in accordance with Part III of these Regulations and this Schedule such that the error is corrected within one year starting with the last day on which he could have complied with paragraph (1);

(ii) corrects the error by making an appropriate adjustment under regulation 5(1)(b) (adjustment in CCL return) in relation to an accounting period of his ending no later than six months after the last day on which he could have complied with sub-paragraph (1);

(iii) makes good to the Commissioners within thirty days, starting from the last day on which he could have complied with sub-paragraph (1), the deficiency in the CCL charged on the supplies as a result of the certificate having been incorrect.

(7) Sub-paragraph (6)(b)(ii) only applies if the recipient is a registrable person and sub-paragraph (6)(b)(i) cannot apply.

(8) Sub-paragraph (6)(b)(iii) only applies if sub-paragraphs (6)(b)(i) and (6)(b)(ii) cannot apply.

(9) If—

(a) the recipient complies with sub-paragraph (6)(b) (subject to sub-paragraphs (7) and (8)), and

(b) the certificate in question was incorrect by less than 20 percentage points,

the Commissioners may be satisfied, for the purposes of paragraph 101 of the Act (civil penalty for incorrect certification, etc.), that the recipient had a reasonable excuse for having given the supplier certificate in question.

(10) If the recipient does not review the accuracy of the supplier certificate in accordance with sub-paragraph (1), and the certificate was (or remains) incorrect, paragraph 101 of the Act shall apply accordingly (civil penalty for incorrect certification, etc. subject to reasonable excuse).

(11) This paragraph only applies in relation to a supply or supplies to which regulation 34 or 35 applies (supplier certificates for exclusions, exemptions and half-rates).

Tax credits for recipient

6.—(1) The recipient in each of the following cases is entitled to a tax credit in respect of any relevant amount of CCL charged on the supply in question (subject to paragraph 5(5) and the other provisions of this Schedule including those provisions relating to the making of a relevant claim to the Commissioners)—

(a) after a taxable supply has been made, there is such a change in circumstances or any person’s intentions that, if the changed circumstances or intentions had existed at the time the supply was made, the supply would not have been a taxable supply;

(b) after a supply of a taxable commodity is made on the basis that it is a taxable supply, it is determined that the supply was not (to any extent) a taxable supply;

(c) after a taxable supply has been made on the basis that it was neither a half-rate supply nor a reduced-rate supply, it is determined that the supply was (to any extent) a half-rate or reduced-rate supply;

(d) CCL is accounted for on a half-rate supply as if the supply were neither a half-rate supply nor a reduced-rate supply;

(e) after a charge to CCL has arisen on a supply of a taxable commodity (“the original commodity”) to a person who uses the commodity supplied in producing taxable commodities primarily for his own consumption, that person makes supplies of any of the commodities in whose production he has used the original commodity.

(2) In sub-paragraph (1), “relevant amount of CCL” refers to the difference between—

(a) the amount of CCL that ought to have been charged by or under the Act at the time of supply had the supplier certificate been correct, and

(b) the amount of CCL that the supplier accounted for (or ought to have accounted for) on the basis of the incorrect supplier certificate.

7.  A tax credit shall only arise under paragraph 6 if a claim is made by the recipient acting in accordance with paragraph 8 or 9, as the case requires.

8.—(1) Subject to sub-paragraph (4), the recipient shall claim any such tax credit—

(a) by bringing it into account by way of a proper allowance in or adjustment to a supplier certificate delivered by him subsequent to the review required by paragraph 5(1) or, if he changes supplier, any supplier certificate he delivers to his new supplier, or

(b) by bringing it into account when he is accounting for CCL due from him for any accounting period (but only to the extent that he is unable to make a claim under sub-paragraph (a)).

(2) Accordingly, in the case of a claim under sub-paragraph (1)(b)—

(a) the requirements of regulation 5 (content of returns), regulation 6 (payment of CCL) and regulation 7 (CCL accounts) apply subject to sub-paragraph (1)(b); but

(b) sub-paragraph (1)(b) applies subject to regulation 27 (corrections) and regulation 28 (corrections not exceeding £2,000).

(3) A claim subject to sub-paragraphs (1) and (2) shall be regarded as a claim for repayment of CCL for the purposes of paragraph 64 of the Act (supplemental provisions about repayments, etc.) (and see sub-paragraph (4)).

(4) Where the total tax credit claimed by a recipient exceeds the total of any CCL due from him for the accounting period in question, or the recipient is otherwise unable to bring a tax credit wholly into account under sub-paragraph (1)(b), the Commissioners shall repay to him an amount equal to the excess (but see regulations 29 and 30).

(5) Given the provision made by paragraph 62(4) of the Act, this paragraph has effect subject to paragraph 64 of the Act (application of supplemental provisions about repayments: three year time limit, unjust enrichment, etc.).

(6) A recipient shall not be regarded as being unable to make a claim under sub-paragraph (1)(a) or (1)(b) by reason only of this paragraph having effect subject to paragraph 64 of the Act (three year time limit, etc.).

9.—(1) Where the recipient is unable to make a claim in accordance with paragraph 8(1), the Commissioners shall repay to him the amount of the tax credit if they are satisfied that he has made a proper claim to them in writing for this purpose.

(2) A recipient making a claim under sub-paragraph (1) must furnish to the Commissioners full particulars in relation to the tax credit claimed, including (but not limited to)—

(a) any relevant supplier certificate on the basis of which the relevant CCL was accounted for by the supplier;

(b) any relevant analysis document supporting any such supplier certificate;

(c) the amount of the CCL in question and the date and manner of its payment to the Commissioners whether by the recipient, the supplier or otherwise;

(d) the circumstances, events, records and documentary or other evidence by virtue of which the recipient claims that any relevant entitlement to a tax credit arises;

(e) the period of time by reference to which the recipient consumed the relevant taxable commodity or was supplied with the relevant taxable commodity by the supplier to whom he delivered the relevant supplier certificate; and

(f) any matter, item or particular in any way relevant to the question whether or not a tax credit arises under this Schedule in favour of the recipient.

(3) Where the Commissioners are satisfied that a person who has made a claim in accordance with sub-paragraphs (1) and (2) is entitled to a tax credit and that he has not previously had the benefit of that credit, they shall repay to him an amount equal to the credit (but see regulations 29 and 30).

(4) The Commissioners shall not be liable to make any repayment under this regulation unless and until the recipient has made all the returns, if any, which he was required to make (but see regulation 29 and 30).

(5) Given the provision made by paragraph 62(4) of the Act, this regulation has effect subject to paragraph 64 of the Act (application of supplemental provisions about repayments: three year time limit, unjust enrichment, etc.).

(6) Accordingly, for the purposes of sub-paragraph (1), a recipient shall not be regarded as being unable to make a claim under paragraph 8(1) by reason only of this paragraph having effect subject to paragraph 64 of the Act (three year time limit, etc.).

10.  If and to the extent that they may be relevant for the purposes of this Schedule, regulations 19 to 25 (unjust enrichment: reimbursement arrangements to be disregarded) shall apply in relation to a tax credit provided for by this Schedule as if—

(a) the reference in regulation 19 to “claim” included a claim made under this Schedule; and

(b) the references in those regulations to “(recipient)” or “(recipients)” were not present.

11.  No tax credit shall arise under Part II of these Regulations where provision for a tax credit is made in this Schedule.

Miscellaneous

12.—(1) The recipient may deliver to the supplier a further certificate updating the information in the original supplier certificate in the light of actual or anticipated events—

(a) after 3 months from when the original supplier certificate was delivered to the supplier or last updated under this paragraph, or

(b) within 30 days after a significant change in circumstances.

(2) For the purposes of sub-paragraph (1)(b), a change of circumstances is significant only if it would result in the existing value for the recipient’s relief percentage having to be revised by at least 20 percentage points.

(3) The supplier shall then apply the CCL relief percentage to any supplies he makes to which the updated supplier certificate relates and may, for this purpose, rely on the relevant recipient’s relief percentage as updated.

(4) Paragraphs 5 (compulsory updates) and 6 (recipient’s tax credits) have effect subject to any updates made by the recipient under this paragraph.

(5) Any provision of these Regulations, including this Schedule, that applies to or in relation to a supplier certificate shall apply to or in relation to such a supplier certificate as updated under this paragraph.

13.—(1) Where a recipient changes supplier, any supplier certificate delivered to any earlier supplier (and any supporting analysis document) shall not have effect in relation to supplies from the later supplier.

(2) In these circumstances, paragraphs 5 to 11 shall apply in relation to the combined effect of the supplier certificate the recipient delivered to the earlier supplier and the supplier certificate he delivers to the later supplier.

14.—(1) A supplier to whom a supplier certificate is delivered shall, within 90 days starting with the day after it is delivered, deliver to the Commissioners in writing a summary of the information contained in that certificate.

(2) The supplier shall include in that summary—

(a) such information as is necessary to identify the recipient in question,

(b) such information as is necessary to identify each address to which the supplies in question are supplied, and

(c) the relevant recipient’s relief percentage and, if different, the CCL relief percentage actually applied by the supplier to the supplies in question.

15.  A recipient who delivers a supplier certificate shall—

(a) retain a copy for a period of six years starting with the time of supply of the final supply to which it relates,

(b) retain any relevant analysis document for a period of six years starting with the time of supply of the final supply to which it relates, and

(c) make a copy of any such certificate and analysis document available to the Commissioners on request.