Finance (No. 4) Bill (HC Bill 325)

(3) Different bodies may be appointed in relation to facilities in
different parts of the United Kingdom.

(1) The Administrator is responsible for administering the scheme set
out in paragraphs 44 to 52.

(2) 5This covers (in particular) the administration of climate change
agreements.

(3) In this Part of this Schedule “administrative function” means—

(a) the Administrator’s function imposed by sub-paragraph
(1), or

(b) 10any other power or duty of the Administrator conferred or
imposed by or under a provision of this Part of this
Schedule.

(1) The Administrator may require persons falling within sub-
paragraph (2) to pay to the Administrator such charges as may
15from time to time be specified to cover any costs incurred by the
Administrator in carrying out any administrative function.

(2) The persons falling within this sub-paragraph are parties or
potential or former parties to agreements falling within paragraph
47 or to umbrella or underlying agreements within the meaning of
20paragraph 48.

(3) In sub-paragraph (1) “specified” means specified in, or
determined in accordance with, a scheme made by the
Administrator for the purposes of this paragraph.

(4) A scheme may provide for the times at which, and the manner in
25which, charges are to be paid.

(5) Paragraph 146(7) applies in relation to the Administrator’s power
to make a scheme under this paragraph as it applies in relation to
a power to make regulations under this Schedule.

(6) A scheme may revoke or vary any previous scheme.

(7) 30A scheme may be made only with the consent of the Secretary of
State.

(8) Charges received by the Administrator must be paid to the
Secretary of State who must pay them into the Consolidated Fund.

(9) Sub-paragraph (8) does not apply if the Administrator is the
35Environment Agency.

(1) The Secretary of State may by regulations make provision about
the administration of the scheme set out in paragraphs 44 to 52.

(2) Sub-paragraph (1) covers (in particular)—

(a) provision about climate change agreements, and

(b) 40provision about how the Administrator is to carry out any
administrative function.

(3) Without prejudice to the generality of sub-paragraphs (1) and (2),
regulations may contain any provision falling within paragraph
52E or 52F.

(4) Regulations may—

(a) require the Administrator to obtain the Secretary of State’s
consent to any course of action,

(b) confer or impose other powers or duties on the Secretary of
5State or the Administrator, or

(c) confer or impose powers or duties on other persons.

(5) The Secretary of State may give directions to the Administrator
about how the Administrator is to carry out any administrative
function (and this power to give directions includes power to vary
10or revoke directions previously given).

(6) The Secretary of State may issue guidance to the Administrator
about how the Administrator is to carry out any administrative
function; and the Administrator must have regard to any
guidance issued.

(1) 15Regulations may—

(a) specify terms which must be included in agreements
falling within paragraph 47 or in umbrella or underlying
agreements within the meaning of paragraph 48, and

(b) confer power on the Administrator to vary such
20agreements to take account of any changes in the terms
specified under paragraph (a) from time to time.

(2) The terms which may be specified under sub-paragraph (1)(a)
include (in particular) terms falling within paragraph 49(4) under
which the absence (or partial absence) of any progress towards
25meeting any targets for a facility may be made up for by the
payment to the Administrator of a sum specified in, or determined
in accordance with, the regulations.

(3) Sums received by the Administrator must be paid to the Secretary
of State who must pay them into the Consolidated Fund.

(1) 30Regulations may confer power on the Administrator—

(a) to impose a financial penalty of a specified amount on a
person who, as a representative of a facility to which a
climate change agreement applies, contravenes a term of
the agreement, and

(b) 35to terminate, with effect from a specified date, the
agreement so far as it applies to the facility if—

(i) the financial penalty is not paid to the
Administrator within a specified period, or

(ii) the contravention is not remedied to the
40Administrator’s satisfaction within a specified
period.

(2) Regulations may also confer power on the Administrator to
terminate, with effect from a specified date and without first
imposing a financial penalty, a climate change agreement so far as
45it applies to a facility if there is a contravention of the agreement
by a person who is a representative of the facility.

(3) Neither sub-paragraph (1)(a) nor sub-paragraph (2) covers a
failure to meet, or to make progress towards meeting, any targets
set for a facility under a climate change agreement.

(4) If regulations falling within sub-paragraph (1) or (2) are made, the
5regulations must also—

(a) confer rights of appeal against a decision taken by the
Administrator to impose a financial penalty or to terminate
a climate change agreement (as the case may be), and

(b) specify the court, tribunal or person who is to hear and
10determine the appeal.

(5) The Secretary of State may be specified for the purposes of sub-
paragraph (4)(b).

(6) Penalties received by the Administrator must be paid to the
Secretary of State who must pay them into the Consolidated Fund.

(7) 15Regulations may confer power on the Administrator to terminate,
with effect from a specified date, a climate change agreement so
far as it applies to a facility in specified circumstances not
involving a contravention of the agreement.

(8) In this paragraph—

• 20“representative” has the meaning given by paragraph 47(2),
  and

• “specified” means specified in, or determined in accordance
  with, the regulations.

(9) Sub-paragraph (10) or (11) (as the case may be) applies if a climate
25change agreement is terminated in respect of a facility before the
start of, or during, a period specified for the facility in such a
certificate as is mentioned in paragraph 44(1).

(10) If the termination is before the start of the specified period, the
Administrator must, in respect of the facility, give a variation
30certificate within paragraph 45(1)(a) in relation to the specified
period.

(11) If the termination is during the specified period, the
Administrator must, in respect of the facility, give a variation
certificate within paragraph 45(1)(b) in relation to the specified
35period specifying the day of the termination.”

10 In paragraph 137(1) (disclosure of information) after paragraph (f) insert—

“(fa) the Administrator (within the meaning of Part 4 of this
Schedule);”.

11 The amendments made by this Schedule have no effect in relation to climate
40change agreements entered into with the Secretary of State before the day on
which this Act is passed.

Section 205

SCHEDULE 31 Climate change levy: supplies subject to the carbon price support rates and
combined heat and power stations

Part 1 5Main provision

Amendments to Schedule 6 to FA 2000

1 Schedule 6 to FA 2000 (climate change levy) is amended as follows.

2 In paragraph 4(2)(b) (definition of “taxable supply”) after “24” insert “, 42C,
42D”.

(1) 10Paragraph 6 (supplies of gas) is amended as follows.

(2) In sub-paragraph (1A) for “but not sub-paragraph” substitute “or”.

(3) In sub-paragraph (2A) after “24” insert “, 42C, 42D”.

4 After paragraph 14(5) (exemption: supplies to electricity producers) insert—

“(6) A supply of a taxable commodity other than electricity to a person
15is exempt from the levy if—

(a) the commodity is to be used by that person in producing
electricity in a generating station,

(b) the generating station is neither a fully exempt combined
heat and power station nor a partly exempt combined heat
20and power station, and

(c) the capacity of the generating station for producing
electricity is no more than 2 megawatts.

(7) If the generating station mentioned in sub-paragraph (6)(a) is one
of a number of generating stations (which may include fully or
25partly exempt combined heat and power stations) which—

(a) are situated in the United Kingdom, and

(b) are owned by P or persons connected with P,

the reference to the capacity of the generating station in sub-
paragraph (6)(c) is to be read as a reference to the capacity of all
30those generating stations taken together.

(8) For the purposes of sub-paragraph (7)(b)—

(a) “P” is the person who owns the generating station
mentioned in sub-paragraph (6)(a), and

(b) section 1122 of the Corporation Tax Act 2010 (“connected”
35persons) applies.

(9) A supply of coal to a person is exempt from the levy if—

(a) the coal is to be used by that person in producing electricity
in a generating station which is neither a fully exempt
combined heat and power station nor a partly exempt
40combined heat and power station, and

(b) the coal has a gross calorific value of no more than 15
gigajoules per tonne.”

(1) Paragraph 15 (exemption: supplies to combined heat and power stations) is
amended as follows.

(2) In sub-paragraph (1)—

(a) for “a taxable commodity” substitute “electricity”,

(b) 5in paragraph (a), for “commodity” substitute “electricity”, and

(c) omit the final sentence.

(3) In sub-paragraph (2)—

(a) in paragraph (a), for “a taxable commodity” substitute “electricity”,
and

(b) 10in paragraph (b), for “commodity” substitute “electricity”.

(4) In sub-paragraph (3) for “a taxable commodity” substitute “electricity”.

(5) After sub-paragraph (3) insert—

“(3A) A supply of a taxable commodity other than electricity to a person
is exempt from the levy if—

(a) 15that person intends to cause the commodity to be used in—

(i) a fully exempt combined heat and power station, or

(ii) a partly exempt combined heat and power station,

in producing any outputs of the station, and

(b) the capacity of the station for producing electricity is no
20more than 2 megawatts.

(3B) If the station mentioned in sub-paragraph (3A)(a) is one of a
number of generating stations (which may include stations which
are neither fully exempt combined heat and power stations nor
partly exempt combined heat and power stations) which—

(a) 25are situated in the United Kingdom, and

(b) are owned by P or persons connected with P,

the reference to the capacity of the station in sub-paragraph
(3A)(b) is to be read as a reference to the capacity of all those
generating stations taken together.

(3C) 30For the purposes of sub-paragraph (3B)(b)—

(a) “P” is the person who owns the station mentioned in sub-
paragraph (3A)(a), and

(b) section 1122 of the Corporation Tax Act 2010 (“connected”
persons) applies.

(3D) 35A supply of coal to a person is exempt from the levy if—

(a) that person intends to cause the coal to be used in—

(i) a fully exempt combined heat and power station, or

(ii) a partly exempt combined heat and power station,

in producing any outputs of the station, and

(b) 40the coal has a gross calorific value of no more than 15
gigajoules per tonne.”

(6) Before sub-paragraph (4)(a) insert—

“(za) outputs” has the meaning given by
paragraph 148(9);”.

6 After paragraph 15 insert—

(1) This paragraph applies to a supply of a taxable commodity
mentioned in sub-paragraph (2) to a person if that person intends
to cause the commodity to be used in—

(a) 5a fully exempt combined heat and power station, or

(b) a partly exempt combined heat and power station,

in producing any outputs of the station.

(2) The taxable commodities referred to in sub-paragraph (1) are—

(a) gas supplied by a gas utility or any gas supplied in a
10gaseous state that is of a kind supplied by a gas utility;

(b) any petroleum gas, or other gaseous hydrocarbon,
supplied in a liquid state;

(c) coal which has a gross calorific value of more than 15
gigajoules per tonne.

(3) 15The Treasury may by regulations provide that the non-electricity
part of a supply to which this paragraph applies is exempt from
the levy to the extent determined in accordance with the
regulations.

(4) In sub-paragraph (3) the reference to “the non-electricity part” of a
20supply is to the supply excluding so much of it as is referable to
the production of electricity in the station, as determined in
accordance with regulations under paragraph 42A(5B).

(5) Regulations under sub-paragraph (3) may, in particular, include—

(a) provision in respect of the calculations, measurements,
25data and procedures to be made or used in determining the
extent to which a supply is exempt;

(b) provision that, so far as framed by reference to any
document, is framed by reference to that document as from
time to time in force.

(6) 30The first regulations made under sub-paragraph (3) may have
retrospective effect.

(7) If the exemption of a supply to any extent under this paragraph is
part of an aid scheme within Article 25 of Commission Regulation
(EC) No. 800/2008, paragraph 42(4) cites the title and publication
35reference of that Regulation for the purpose of complying with
Article 3(1) of that Regulation.”

7 After paragraph 24(4) (deemed supplies) insert—

“(4A) Sub-paragraph (4B) applies if the supply mentioned in sub-
paragraph (1A) or (1B) (or a part of the supply) would have been,
40or is determined to have been, a taxable supply subject to the
carbon price support rates (see paragraph 42A).

(4B) The deemed taxable supply under sub-paragraph (3) (or the
deemed taxable supply so far as it covers the part in question of
the supply mentioned in sub-paragraph (1A) or (1B)) is to be
45subject to the carbon price support rates.”

8 After paragraph 26(3) (electricity or gas: supply when climate change levy
accounting document issued) insert—

“(3A) Sub-paragraphs (2) and (3) are subject to paragraph 28A.”

9 After paragraph 28 insert—

5“Gas: supply when actually supplied

(1) This paragraph applies to supplies of gas where—

(a) the gas is supplied in a gaseous state and is of a kind
supplied by a gas utility,

(b) the supply by which the gas is supplied is a taxable supply,
10and

(c) the person liable to account for the levy on that supply is
the person to whom the supply is made.

(2) Where this paragraph applies, a supply is treated as taking place
when the gas is actually supplied to that person.”

10 15After paragraph 29(7) (electricity or gas: special utility schemes) insert—

“(8) This paragraph does not apply in relation to supplies of gas where
paragraph 28A applies.”

11 In paragraph 34 (other commodities: deemed supplies)—

(a) in sub-paragraph (1)(b), after “24” insert “, 42C, 42D”, and

(b) 20in sub-paragraph (4), after “paragraph” insert “42C, 42D or”.

12 In paragraph 39(1)(c) (regulations as to time of supply), after “24” insert “,
42C, 42D”.

(1) Paragraph 40 (persons liable to account for levy) is amended as follows.

(2) In sub-paragraph (1) for “(2) or (3)” substitute “(2), (3), (4) or (5)”.

(3) 25After sub-paragraph (3) insert—

“(4) In the case of a taxable supply subject to the carbon price support
rates (see paragraph 42A), the person liable to account for the levy
charged on the supply is the person to whom the supply is made.

(5) In the case of a taxable supply to a person who intends to cause the
30commodity supplied to be used in—

(a) a fully exempt combined heat and power station, or

(b) a partly exempt combined heat and power station,

in producing any outputs of the station, the person liable to
account for the levy charged on the supply is the person to whom
35the supply is made.”

(1) Paragraph 42A (supplies subject to the carbon price support rates) is
amended as follows.

(2) In sub-paragraph (2)(a) for “, apart from electricity,” substitute “mentioned
in the Table in sub-paragraph (5)”.

(3) After sub-paragraph (2) insert—

“(2A) A supply within sub-paragraph (3) is subject to the carbon price
support rates so far as it is referable to the production of electricity
in the station.”

(4) 5In sub-paragraph (3) after “taxable commodity” insert “mentioned in the
Table in sub-paragraph (5)”.

(5) In sub-paragraph (5), in the Table—

(a) in the first column of the final row, for “Any other taxable
commodity (apart from electricity)” substitute “Coal”, and

(b) 10in the second column of that row, for “£0.01188 per kilogram”
substitute “£0.44264 per gigajoule”.

(6) After sub-paragraph (5) insert—

“(5A) Sub-paragraph (4) needs to be read with paragraph 42B.

(5B) For the purposes of sub-paragraph (2A) the extent to which a
15supply is referable to the production of electricity in a station is to
be determined in accordance with regulations made by the
Treasury.

(5C) Regulations under sub-paragraph (5B) may, in particular,
include—

(a) 20provision in respect of the calculations, measurements,
data and procedures to be made or used;

(b) provision that, so far as framed by reference to any
document, is framed by reference to that document as from
time to time in force.”

(7) 25In sub-paragraph (6) after “paragraph” insert “and paragraph 42B”.

(8) For sub-paragraph (7) substitute—

“(7) Regulations under sub-paragraph (6) may, in particular, include
provision—

(a) for determining whether or not a taxable supply is subject
30to the carbon price support rates,

(b) if the supply is subject to those rates, for determining
whether or not paragraph 42B(2) applies in relation to the
supply, and

(c) if paragraph 42B(2) applies in relation to the supply, for
35determining the reduction in the relevant carbon price
support rate.”

15 After paragraph 42A insert—

(1) Sub-paragraph (2) applies for the purposes of paragraph 42A(4)
if—

(a) 40the taxable supply is a supply of a taxable commodity to be
used for producing electricity in a generating station, and

(b) in the calendar year in which the supply is made, carbon
capture and storage technology is operated in relation to
carbon dioxide generated by the generating station in
45producing electricity.

(2) In relation to the supply, only C% of the relevant carbon price
support rate is to be applied (instead of the full rate).

(3) “C%” is 100% minus the generating station’s carbon capture
percentage for the calendar year.

(4) 5The generating station’s “carbon capture percentage” for the
calendar year is the percentage of the station’s generated carbon
dioxide for that year which, through the operation of the carbon
capture and storage technology, is—

(a) captured, and

(b) 10then disposed of by way of permanent storage.

(5) The generating station’s “generated carbon dioxide” for the
calendar year is the amount of carbon dioxide generated in the
year by the station in producing electricity through the burning of
taxable commodities mentioned in the Table in paragraph 42A(5).

(6) 15In this paragraph “carbon capture and storage technology” and
“carbon dioxide” have the meaning given by section 7(3) and (4) of
the Energy Act 2010.

(7) Sub-paragraph (8) applies for the purposes of sub-paragraph (4) in
relation to any carbon dioxide if—

(a) 20the carbon dioxide is captured but then leaks out and
therefore is not disposed of by way of permanent storage,
but

(b) the leak does not occur—

(i) on the land on which the generating station is
25situated,

(ii) on any other land under the control of the station’s
operator or a person connected with the station’s
operator, or

(iii) from any pipeline or other facility or installation
30which is operated by the station’s operator or a
person connected with the station’s operator.

Section 1122 of the Corporation Tax Act 2010 (“connected”
persons) applies for the purposes of paragraph (b).

(8) The carbon dioxide is to be treated as if it had been disposed of by
35way of permanent storage.

(9) If the percentage mentioned in sub-paragraph (4) is not a whole
number, it is to be rounded to the nearest whole number (taking
0.5% as nearest to the next whole number).

(1) This paragraph applies if—

(a) 40a taxable supply (“the original supply”) subject to the
carbon price support rates has been made to any person
(“the recipient”),

(b) the original supply was made on the basis that paragraph
42B(2) applied in relation to the original supply, and

(c) 45it is later determined—

(i) that paragraph 42B(2) did not apply in relation to
the original supply, or

(ii) that the reduction given, by virtue of paragraph
42B(2), in the amount payable by way of levy on the
original supply was too much.

(2) For the purposes of this Schedule—

(a) 5the recipient is deemed to make a taxable supply to itself of
the taxable commodity in question, and

(b) the amount payable by way of levy on that deemed supply
is—

(i) the total amount payable on the original supply on
10the basis of the later determination mentioned in
sub-paragraph (1)(c), less

(ii) the amount previously determined to be payable
on the original supply.

(1) This paragraph applies if—

(a) 15a taxable supply (“the original supply”) is made to a
person (“the recipient”) on the basis that it is, or is to some
extent, a taxable supply subject to the carbon price support
rates, and

(b) it is later determined that that basis was incorrect and, in
20consequence, the amount previously determined to be
payable by way of levy on the original supply was too low.

(2) For the purposes of this Schedule—

(a) the recipient is deemed to make a taxable supply to itself of
the taxable commodity in question, and

(b) 25the amount payable by way of levy on that deemed supply
is—

(i) the total amount payable on the original supply on
the basis of the later determination mentioned in
sub-paragraph (1)(b), less

(ii) 30the amount previously determined to be payable
on the original supply.”

16 After paragraph 62(1)(b) (tax credits) insert—

“(ba) after a taxable supply subject to the carbon price support
rates (see paragraph 42A) is made on the basis that paragraph
35 42B(2) does not apply in relation to the supply, it is
determined that paragraph 42B(2) does apply;

(bb) after a taxable supply subject to the carbon price support
rates is made on the basis that paragraph 42B(2) applies in
relation to the supply, it is determined that the reduction
40given, by virtue of paragraph 42B(2), in the amount payable
by way of levy on the supply was too little;

(bc) after a taxable supply is made on the basis that it is, or is to
some extent, subject to the carbon price support rates, it is
determined that that basis was incorrect and, in consequence,
45the amount previously determined to be payable by way of
levy on the supply was too much;”.