Finance Bill

Session 2012 - 13
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Finance Bill

Finance Bill
Schedule 30 — Climate change levy: climate change agreements
594

      (3)
Different bodies may be appointed in relation to facilities in
different parts of the United Kingdom.
52B   (1)
The Administrator is responsible for administering the scheme set
out in paragraphs 44 to 52.
      (2)
This covers (in particular) the administration of climate change
5
agreements.
      (3)
In this Part of this Schedule “administrative function” means—
(a)
the Administrator’s function imposed by sub-paragraph
(1), or
(b)
any other power or duty of the Administrator conferred or
10
imposed by or under a provision of this Part of this
Schedule.
52C   (1)
The Administrator may require persons falling within sub-
paragraph (2) to pay to the Administrator such charges as may
from time to time be specified to cover any costs incurred by the
15
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
paragraph 48.
20
      (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
which, charges are to be paid.
25
      (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)
A scheme may be made only with the consent of the Secretary of
30
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
Environment Agency.
35
52D   (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)
provision about how the Administrator is to carry out any
40
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.

Finance Bill
Schedule 30 — Climate change levy: climate change agreements
595

      (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
State or the Administrator, or
5
(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
or revoke directions previously given).
10
      (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.
52E   (1)
Regulations may—
15
(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
agreements to take account of any changes in the terms
20
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
meeting any targets for a facility may be made up for by the
25
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.
52F   (1)
Regulations may confer power on the Administrator—
30
(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)
to terminate, with effect from a specified date, the
35
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
Administrator’s satisfaction within a specified
40
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
it applies to a facility if there is a contravention of the agreement
45
by a person who is a representative of the facility.

Finance Bill
Schedule 30 — Climate change levy: climate change agreements
596

      (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
regulations must also—
5
(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
determine the appeal.
10
      (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)
Regulations may confer power on the Administrator to terminate,
15
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—
“representative” has the meaning given by paragraph 47(2),
20
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
change agreement is terminated in respect of a facility before the
25
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
certificate within paragraph 45(1)(a) in relation to the specified
30
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
period specifying the day of the termination.”
35
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
change agreements entered into with the Secretary of State before the day on
40
which this Act is passed.

Finance Bill
Schedule 31 — Climate change levy: supplies subject to the carbon price support rates and combined heat and power stations
Part 1 — Main provision
597

Schedule 31
Section 205

Climate change levy: supplies subject to the carbon price support rates and
combined heat and power stations
Part 1
Main provision
5
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”.
3     (1)
Paragraph 6 (supplies of gas) is amended as follows.
10
      (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
is exempt from the levy if—
15
(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
and power station, and
20
(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
partly exempt combined heat and power stations) which—
25
(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
those generating stations taken together.
30
      (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”
persons) applies.
35
      (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
combined heat and power station, and
40
(b)
the coal has a gross calorific value of no more than 15
gigajoules per tonne.”

Finance Bill
Schedule 31 — Climate change levy: supplies subject to the carbon price support rates and combined heat and power stations
Part 1 — Main provision
598

5     (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)
in paragraph (a), for “commodity” substitute “electricity”, and
5
(c)
omit the final sentence.
      (3)
In sub-paragraph (2)—
(a)
in paragraph (a), for “a taxable commodity” substitute “electricity”,
and
(b)
in paragraph (b), for “commodity” substitute “electricity”.
10
      (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)
that person intends to cause the commodity to be used in—
15
(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
more than 2 megawatts.
20
     (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)
are situated in the United Kingdom, and
25
(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)
For the purposes of sub-paragraph (3B)(b)—
30
(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)
A supply of coal to a person is exempt from the levy if—
35
(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)
the coal has a gross calorific value of no more than 15
40
gigajoules per tonne.”
      (6)
Before sub-paragraph (4)(a) insert—
“(za)
“outputs” has the meaning given by
paragraph 148(9);”.

Finance Bill
Schedule 31 — Climate change levy: supplies subject to the carbon price support rates and combined heat and power stations
Part 1 — Main provision
599

6
After paragraph 15 insert—
“15A  (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)
a fully exempt combined heat and power station, or
5
(b)
a partly exempt combined heat and power station,

in producing any outputs of the station.

For this purpose “outputs” has the meaning given by paragraph
148(9).
      (2)
The taxable commodities referred to in sub-paragraph (1) are—
10
(a)
gas supplied by a gas utility or any gas supplied in a
gaseous 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
15
gigajoules per tonne.
      (3)
The 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.
20
      (4)
In sub-paragraph (3) the reference to “the non-electricity part” of a
supply 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—
25
(a)
provision in respect of the calculations, measurements,
data 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
30
time to time in force.
      (6)
The 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
35
(EC) No. 800/2008, paragraph 42(4) cites the title and publication
reference 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-
40
paragraph (1A) or (1B) (or a part of the supply) would have been,
or 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
45
the supply mentioned in sub-paragraph (1A) or (1B)) is to be
subject to the carbon price support rates.”

Finance Bill
Schedule 31 — Climate change levy: supplies subject to the carbon price support rates and combined heat and power stations
Part 1 — Main provision
600

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—
“Gas: supply when actually supplied
5
28A   (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,
and
10
(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
After paragraph 29(7) (electricity or gas: special utility schemes) insert—
15
    “(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)
in sub-paragraph (4), after “paragraph” insert “42C, 42D or”.
20
12
In paragraph 39(1)(c) (regulations as to time of supply), after “24” insert “,
42C, 42D”.
13    (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)
After sub-paragraph (3) insert—
25
    “(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
commodity supplied to be used in—
30
(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
the supply is made.
35

For this purpose “outputs” has the meaning given by paragraph
148(9).”
14    (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
40
in the Table in sub-paragraph (5)”.