EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations, which come into force on 1st April 2013, amend the Climate Change Levy (General) Regulations 2001 (“the General Regulations”) (S.I. 2001/838) and are made following the introduction of carbon price support (CPS) rates of climate change levy (CCL) (“CPS rates”).
Paragraphs 24A and 24B of schedule 6 to the Finance Act 2000 (c. 17) (“the Act”) provide for deemed taxable self-supplies where fossil fuels (other than oil) are delivered to a generating station to be used in producing electricity in the station or are delivered to a combined heat and power (CHP) station and are referable to the production of electricity in the station. Paragraph 42A of the Act provides that these deemed supplies are subject to CPS rates.
Regulation 3 of this instrument amends regulation 11 of the General Regulations to entitle a registrable person who has overpaid the CPS rate of CCL on a deemed supply to reclaim the overpayment.
Regulation 4 inserts new regulation 40A to provide that a quantity of a commodity is not to be the subject of a deemed supply under paragraph 24A of the Act if, by virtue of regulation 40(2), it is the subject of a taxable supply.
Regulation 5 amends regulation 51A of the General Regulations so that it applies to new Schedule 3 and updates the definition of “CHPQA” so that it refers to the latest version of the Standard.
Regulations 6, 7 and 12 make consequential amendments to regulations 51G and 51H of, and paragraph 2 of Schedule 2 to, the General Regulations following amendments made to paragraph 17 of the Act (exemption: self supplies by electricity producers).
Regulation 8 inserts new regulation 51N which introduces new Schedule 3 to the General Regulations.
Regulation 9 amends regulation 52 of the General Regulations to provide that, for the purposes of paragraph 23(3)(b)(ii) of the Act (deemed self-supply of electricity produced from taxable commodities) electricity is not to be treated as produced from taxable commodities if those commodities (other than electricity) have not been the subject of a deemed taxable supply under paragraph 24A, 24B, 24C or 24D of the Act.
Regulation 10 amends regulation 60 of the General Regulations to impose a civil penalty for failing to carry out a review required under new Schedule 3 of the correctness of the quantity of fossil fuels that is referable to the production of electricity in a CHP station.
Regulation 11 amends the CCL relief formula in paragraph 2 of Schedule 1 to the General Regulations as a consequence of the change to the rate of reduced–rates supplies of electricity (but not for reduced rate supplies of other taxable commodities).
Regulation 13 inserts new Schedule 3 which sets out the calculation for determining the extent to which a quantity of fossil fuels (other than oil) delivered to a CHP station is referable to the production of electricity in the station. It also sets out a compulsory review procedure and makes provision for tax credits and further deemed supplies in cases where the quantity determined in accordance with the calculation is subsequently found to be too much or too little.
A Tax Information and Impact Note (TIIN) covering this instrument was published on 11th December 2012 alongside draft clauses of the Finance Bill 2013 and this instrument. This has been updated by a further TIIN as a result of changes to the impacts as a result of this instrument and both TIINs are available on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm.