Session 2013 - 14
Internet Publications
Other Bills before Parliament

Finance Bill


Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013

469

 

Schedule 40

Section 198

 

Climate change levy: supplies subject to carbon price support rates etc

Part 1

Earlier provision not to have effect

1     (1)  

On and after 26 March 2013, Schedule 6 to FA 2000 (climate change levy) has

5

effect as if neither—

(a)   

Schedule 20 to FA 2011, nor

(b)   

Parts 1 and 2 of Schedule 32 to FA 2012,

           

had ever been enacted.

      (2)  

Accordingly—

10

(a)   

in FA 2011, section 78 and Schedule 20 are omitted, and

(b)   

in FA 2012, Parts 1 and 2 of Schedule 32 are omitted.

      (3)  

The amendments made by sub-paragraph (2) are treated as having come

into force on 26 March 2013.

Part 2

15

New provision having effect from 1 April 2013

New provision

2          

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

3          

In paragraph 4 (definition of “taxable supply”) in sub-paragraph (2)(b) after

“24” insert “, 24A, 24B, 24C, 42D”.

20

4          

In paragraph 5 (supplies of electricity) after sub-paragraph (2) insert—

   “(2A)  

Levy is chargeable on a supply of electricity if—

(a)   

the supply is made by an exempt unlicensed electricity

supplier who is an auto-generator or who is of a

description prescribed by regulations made by the

25

Treasury,

(b)   

the electricity was produced in a generating station owned

by the supplier using commodities which were the subject

of a deemed supply under paragraph 24A or which would

have been the subject of such a supply had the reference in

30

paragraph 24A(1)(a) to Great Britain been a reference to

the United Kingdom instead,

(c)   

the supply is not a deemed supply under paragraph 23(3),

and

(d)   

the person to whom the supply is made is not an electricity

35

utility.”

5          

In paragraph 6 (supplies of gas) in sub-paragraph (2A) after “24” insert “,

24A, 24B, 24C, 42D”.

6     (1)  

Paragraph 14 (exemption for supplies to electricity producers) is amended

as follows.

40

 
 

Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013

470

 

      (2)  

In sub-paragraphs (2)(b) and (3)(b) after “electricity” insert “in a small

generating station”.

      (3)  

After sub-paragraph (3) insert—

  “(3ZA)  

Sub-paragraph (1) does not exempt a supply where the person to

whom the supply is made—

5

(a)   

uses the commodity supplied in producing electricity in a

stand-by generator, and

(b)   

uses the electricity produced otherwise than in exemption-

retaining ways.”

      (4)  

After sub-paragraph (3A) insert—

10

   “(3B)  

Paragraph 24A makes provision under which carbon price

support rate commodities intended to be used in a generating

station may be the subject of a deemed taxable supply (and,

accordingly, this paragraph needs to be read subject to that

paragraph).”

15

      (5)  

Omit sub-paragraphs (4) and (5).

7          

In paragraph 15 (exemption for supplies to combined heat and power

stations) after sub-paragraph (4) insert—

   “(4A)  

Paragraph 24B makes provision under which carbon price

support rate commodities intended to be used in a combined heat

20

and power station may be the subject of a deemed taxable supply

(and, accordingly, this paragraph needs to be read subject to that

paragraph).”

8     (1)  

Paragraph 17 (exemption: self-supplies by electricity producers) is amended

as follows.

25

      (2)  

After sub-paragraph (1) insert—

   “(1A)  

The supply is exempt from levy if it is a supply of electricity

produced in—

(a)   

a fully exempt combined heat and power station,

(b)   

a partly exempt combined heat and power station,

30

(c)   

a stand-by generator, or

(d)   

a small generating station.

     (1B)  

Sub-paragraph (1A)(d) applies only if the producer is—

(a)   

an auto-generator, or

(b)   

an exempt unlicensed electricity supplier of a description

35

prescribed by regulations made by the Treasury.”

      (3)  

In sub-paragraph (2) for the words from “If” to “unless—” substitute “This

paragraph does not exempt the supply if—”.

      (4)  

Omit sub-paragraphs (3) and (4).

9          

In paragraph 21 (regulations to avoid double charges to levy) after sub-

40

paragraph (2) insert—

   “(2A)  

In sub-paragraph (2)(b) “taxable supply” does not include a

deemed supply under paragraph 24A, 24B, 24C or 42D.”

 
 

Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013

471

 

10         

In Part 2 after paragraph 24 insert—

“Deemed taxable supply: commodities to be used in producing electricity

24A   (1)  

Sub-paragraph (2) applies if—

(a)   

a quantity of a carbon price support rate commodity is

brought onto, or arrives at, a site in Great Britain at which

5

a generating station is situated,

(b)   

that quantity of the commodity is intended to be used for

producing electricity in the station,

(c)   

the station is neither a fully exempt combined heat and

power station nor a partly exempt combined heat and

10

power station, and

(d)   

the station is neither a small generating station nor a stand-

by generator.

      (2)  

For the purposes of this Schedule the owner of the station is

deemed to make a taxable supply to himself of that quantity of the

15

commodity.

      (3)  

In sub-paragraph (1)(a) the reference to a commodity being

brought onto, or arriving at, a site covers (in particular) gas in a

gaseous state arriving at the site through a pipe.

      (4)  

For the purposes of sub-paragraph (1) it does not matter—

20

(a)   

if the quantity of the commodity is not the subject of an

actual supply made to the owner of the station, or

(b)   

if the commodity’s availability for use in the station is

subject to any condition.

Deemed taxable supply: commodities to be used in combined heat and power station

25

24B   (1)  

Sub-paragraph (2) applies if—

(a)   

a quantity of a carbon price support rate commodity is

brought onto, or arrives at, the CHPQA site of a fully

exempt combined heat and power station or a partly

exempt combined heat and power station in Great Britain,

30

(b)   

that quantity of the commodity is intended to be used in

the station for producing outputs of the station, and

(c)   

the station is not a small generating station.

      (2)  

For the purposes of this Schedule the operator of the station is

deemed to make a taxable supply to himself of that quantity of the

35

commodity so far as that quantity is referable to the production of

electricity.

      (3)  

For the purposes of sub-paragraph (2) the extent to which a

quantity of a commodity is referable to the production of

electricity is to be determined in accordance with regulations

40

under paragraph 24D(1).

      (4)  

In sub-paragraph (1)(a) the reference to a commodity being

brought onto, or arriving at, the CHPQA site of a station covers (in

particular) gas in a gaseous state arriving at the CHPQA site

through a pipe.

45

 
 

Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013

472

 

      (5)  

In sub-paragraph (1)(b) “outputs” has the meaning given by

paragraph 148(9).

      (6)  

For the purposes of sub-paragraph (1) it does not matter—

(a)   

if the quantity of the commodity is not the subject of an

actual supply made to the operator of the station, or

5

(b)   

if the commodity’s availability for use in the station is

subject to any condition.

      (7)  

In this paragraph “CHPQA site”, in relation to a fully exempt

combined heat and power station or a partly exempt combined

heat and power station, means the site of the scheme in relation to

10

which the station’s CHPQA certificate was issued.

24C   (1)  

This paragraph applies if—

(a)   

a determination (“the initial determination”) is made

under regulations falling within paragraph 24B(3) that—

(i)   

none of a quantity of a carbon price support rate

15

commodity is, or

(ii)   

a proportion of such a quantity is not,

   

referable to the production of electricity,

(b)   

as a result of the initial determination, the quantity or

proportion of a quantity is determined not to be the subject

20

of a deemed supply under paragraph 24B, and

(c)   

it is later determined that, contrary to the initial

determination, the quantity or proportion of a quantity—

(i)   

was referable to the production of electricity, and

(ii)   

accordingly, should have been determined to be

25

the subject of a deemed supply under paragraph

24B.

      (2)  

For the purposes of this Schedule—

(a)   

the operator of the station in question is deemed to make a

taxable supply to himself of the quantity or proportion of

30

a quantity, and

(b)   

the amount payable by way of levy on the deemed supply

is the amount which would have been payable in relation

to the quantity or proportion of a quantity had it been

determined to be the subject of a deemed supply as

35

mentioned in sub-paragraph (1)(c)(ii).

Power to make regulations giving effect to paragraphs 24A to 24C etc

24D   (1)  

The Commissioners may by regulations make provision for giving

effect to paragraphs 24A to 24C and 42A to 42D.

      (2)  

Regulations under sub-paragraph (1) may, in particular, include

40

provision—

(a)   

for determining whether a deemed supply under

paragraph 24A or 24B is made;

(b)   

for determining the quantity of any commodity which is

the subject of such a deemed supply;

45

(c)   

for determining whether paragraph 42C(2) applies in

relation to a deemed supply under paragraph 24A or 24B

 
 

Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013

473

 

and, if it does, the reduction in the relevant carbon price

support rate.

      (3)  

Regulations under sub-paragraph (1) may include—

(a)   

provision in respect of calculations, measurements, data

and procedures to be made or used;

5

(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.”

11         

After paragraph 38 insert—

“Deemed supplies under paragraph 24A, 24B, 24C or 42D

10

38A   (1)  

A deemed supply under paragraph 24A or 24B is treated as taking

place when the quantity of the commodity is brought onto, or

arrives at, the site at which the station is situated or the CHPQA

site of the station (as the case may be).

      (2)  

A deemed supply under paragraph 24C or 42D is treated as taking

15

place upon the later determination.”

12    (1)  

Paragraph 39 (regulations as to time of supply) is amended as follows.

      (2)  

In sub-paragraph (1)(c) after “24” insert “, 24A, 24B, 24C, 42D”.

      (3)  

In sub-paragraph (3) after “supply)” insert “and 38A”.

13         

In paragraph 42 (amount payable by way of levy) before sub-paragraph (2)

20

insert—

   “(1B)  

Sub-paragraph (1) does not apply to a deemed supply under

paragraph 24A or 24B.”

14         

After paragraph 42 insert—

“42A  (1)  

This paragraph applies to a deemed supply under paragraph 24A

25

or 24B.

      (2)  

The amount payable by way of levy on the deemed supply is the

amount ascertained by applying the relevant carbon price support

rate; and the levy payable on a fraction of a kilowatt hour,

kilogram or gigajoule is that fraction of the levy payable on a

30

kilowatt hour, kilogram or gigajoule.

      (3)  

The carbon price support rates are as follows.

 

Carbon price support

Carbon price support

 
 

rate commodity

rate

 
 

Any gas in a gaseous

£0.00091 per kilowatt

 

35

 

state that is of a kind

hour

 
 

supplied by a gas

  
 

utility

  
 
 

Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013

474

 
 

Carbon price support

Carbon price support

 
 

rate commodity

rate

 
 

Any petroleum gas, or

£0.01460 per kilogram

 
 

other gaseous

  
 

hydrocarbon, in a

  

5

 

liquid state

  
 

Any commodity

£0.44264 per gigajoule

 
 

falling within

  
 

paragraph 3(1)(d) to

  
 

(f)

  

10

 

      (4)  

Sub-paragraph (2) needs to be read with paragraphs 42B and 42C.

42B   (1)  

This paragraph applies for the purposes of paragraph 42A(2) if the

commodity deemed to be supplied is a quantity of a commodity

falling within paragraph 3(1)(d) to (f).

      (2)  

The number of gigajoules in the quantity supplied is to be

15

determined by reference to the total gross calorific value of that

quantity.

      (3)  

Sub-paragraph (4) applies if there is included in that quantity any

coal slurry taken from a slurry pit situated at the site of a coal mine

(including a disused coal mine).

20

      (4)  

The gross calorific value of the coal slurry is to be left out of

account in determining the total gross calorific value of that

quantity.

42C   (1)  

Sub-paragraph (2) applies for the purposes of paragraph 42A(2) if,

in the calendar year in which the deemed supply is treated as

25

taking place, carbon capture and storage technology is operated in

relation to carbon dioxide generated by the station in question in

producing electricity.

      (2)  

In relation to the deemed supply, only C% of the relevant carbon

price support rate is to be applied (instead of the full rate).

30

      (3)  

“C%” is 100% minus the station’s carbon capture percentage for

the calendar year.

      (4)  

The 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

35

storage technology, is—

(a)   

captured, and

(b)   

then disposed of by way of permanent storage.

      (5)  

The station’s “generated carbon dioxide” for the calendar year is

the amount of carbon dioxide generated in the year by the station

40

from the use of carbon price support rate commodities in

producing electricity.

 
 

Finance Bill
Schedule 40 — Climate change levy: supplies subject to carbon price support rates etc
Part 2 — New provision having effect from 1 April 2013

475

 

      (6)  

In 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—

5

(a)   

the 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 station is situated,

10

(ii)   

on any other land under the control of the station’s

owner or a person connected with the station’s

owner, or

(iii)   

from any pipeline or other facility or installation

which is operated by the station’s owner or a

15

person connected with the station’s owner.

           

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

way of permanent storage.

20

      (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).

42D   (1)  

This paragraph applies if—

(a)   

an amount is determined to be payable by way of levy on

25

a deemed supply of a quantity of a commodity under

paragraph 24A or 24B, but

(b)   

it is later determined that that amount is too low.

      (2)  

For the purposes of this Schedule—

(a)   

the person who made the deemed supply is deemed to

30

make a further taxable supply to himself of the quantity of

the commodity, and

(b)   

the amount payable by way of levy on that further deemed

supply is—

(i)   

the total amount payable on the first deemed

35

supply on the basis of the later determination

mentioned in sub-paragraph (1)(b), less

(ii)   

the amount previously determined to be payable

on the first deemed supply.”

15         

In paragraph 55 (notification of registrability) in sub-paragraph (1) after

40

paragraph (a) insert—

“(aa)   

expects to be deemed to make a taxable supply to himself

under paragraph 24A or 24B, or”.

16         

In paragraph 62 (tax credits) in sub-paragraph (1) after paragraph (b)

insert—

45

“(ba)   

a quantity of a carbon price support rate commodity is the

subject of a deemed supply under paragraph 24A or 24B

but afterwards the quantity—

 
 

 
previous section contents continue
 

© Parliamentary copyright
Revised 8 May 2013