Finance Bill - continued        House of Commons
SCHEDULE 6, CLIMATE CHANGE LEVY - continued
PART II, TAXABLE SUPPLIES - continued

back to previous text
 
 
Exemption: electricity from renewable sources
     18. - (1) A supply of electricity is exempt from the levy if-
 
 
    (a) the supply is not one that is deemed to be made under paragraph 22(3),
 
    (b) the supply is made under a contract that contains a renewable source declaration given by the supplier,
 
    (c) prescribed conditions are fulfilled, and
 
    (d) the supplier, and each other person (if any) who is a generator of any renewable source electricity allocated by the supplier to supplies under the contract, has in a written notice given to the Commissioners agreed that he will fulfil those conditions so far as they may apply to him.
      (2) In this paragraph "renewable source declaration" means a declaration that, in each averaging period, the amount of electricity supplied by exempt renewable supplies made by the supplier in the period will not exceed the difference between-
 
 
    (a) the total amount of renewable source electricity that during that period is either acquired or generated by the supplier, and
 
    (b) so much of that total amount as is allocated by the supplier otherwise than to exempt renewable supplies made by him in the period.
  In this sub-paragraph "averaging period" has the same meaning as in paragraph 19 and "exempt renewable supplies" means supplies made on the basis that they are exempt under this paragraph.
 
      (3) For the purposes of this paragraph and paragraph 19, electricity is "renewable source electricity" if-
 
 
    (a) it is generated in a prescribed manner, and
 
    (b) prescribed conditions are fulfilled.
     A manner f generating electricity may be prescribed by reference to the means by which the electricity is generated or the materials from which it is generated (or both).
 
      (4) In prescribing a manner of generating electricity under sub-paragraph (3), the Commissioners must have regard to the object of securing that exemption under this paragraph is only available for supplies of electricity that has a renewable source.
 
      (5) The conditions that may be prescribed under sub-paragraph (1)(c) include, in particular, conditions in connection with-
 
 
    (a) the giving of effect to renewable source declarations;
 
    (b) the supply of information;
 
    (c) the inspection of records and, for that purpose, the production of records in legible form and entry into premises;
 
    (d) monitoring by the Gas and Electricity Markets Authority, or the Director General of Electricity Supply for Northern Ireland, of the application of provisions of, or made under, this paragraph;
 
    (e) the doing of things to or by a person authorised by the Authority or the Director General (as well as to or by the Authority or the Director General);
 
    (f) things being done at times or in ways specified by the Authority, the Director General or such an authorised person.
      (6) A condition prescribed under sub-paragraph (1)(c) may be one that is required to be fulfilled throughout a period, including a period ending after the time when a supply whose exemption turns on the fulfilment of the condition is treated as being made.
 
      (7) The conditions that may be prescribed under sub-paragraph (3)(b) include, in particular, conditions in connection with-
 
 
    (a) the generation of the electricity;
 
    (b) the materials from which the electricity is generated;
 
    (c) any of the matters mentioned in paragraphs (b) to (f) of sub-paragraph (5).
      (8) Each of-
 
 
    (a) the Gas and Electricity Markets Authority, and
 
    (b) the Director General of Electricity Supply for Northern Ireland,
       shall supply the Commissioners with such information (whether or not obtained under this paragraph), and otherwise give the Commissioners such co-operation, as the Commissioners may require in connection with the application (whether generally or in relation to any particular case) of any relevant provisions.
 
      (9) In sub-paragraph (8) "relevant provisions" means provisions of or made under-
 
 
    (a) this paragraph or paragraph 19, or
 
    (b) paragraph 22(3) so far as relating to electricity, or paragraph 22(4).
      (10) None of-
 
 
    (a) section 57(1) of the Electricity Act 1989,
 
    (b) section 42(1) of the Gas Act 1986, and
 
    (c) Article 61(1) of the Electricity (Northern Ireland) Order 1992,
       (provisions restricting disclosure of information) applies to any disclosure of information made in pursuance of sub-paragraph (8).
 
 
Exemption under paragraph 18: averaging periods
     19. - (1) This paragraph applies where a person ("the supplier") makes supplies of electricity on the basis that they are exempt under paragraph 18 ("exempt renewable supplies").
 
      (2) The rules about balancing and averaging periods are-
 
 
    (a) a balancing period is a period of 3 months;
 
    (b) when a balancing period ends, a new one begins;
 
    (c) the first balancing period and the first averaging period begin at the same time;
 
    (d) unless the supplier specifies an earlier time, that time is the time when he is treated as making the first of the exempt renewable supplies;
 
    (e) when an averaging period ends, a new one begins;
 
    (f) an averaging period ends once it has run for 2 years (but may end sooner under paragraph (g) or sub-paragraph (4)(a) or (5)(a));
 
    (g) if the supplier stops making exempt renewable supplies, the end of the balancing period in which he makes the last exempt renewable supply is also the end of the averaging period in which that balancing period falls.
      (3) At the end of each balancing period calculate-
 
 
    (a) the total of-
 
      (i) the quantity of renewable source electricity that the supplier acquired or generated in that period, and
 
      (ii) any balancing credit carried forward to that balancing period; and
 
    (b) the total of-
 
      (i) the quantity of electricity supplied by exempt renewable supplies made by him in that period, and
 
      (ii) any balancing debit carried forward to that balancing period.
      (4) If the total mentioned in sub-paragraph (3)(a) exceeds that mentioned in sub-paragraph (3)(b)-
 
 
    (a) the averaging period within which the balancing period fell ends at the end of the balancing period, and
 
    (b) a balancing credit equal to the difference between the two totals is carried forward to the next balancing period.
      (5) If the totals mentioned in paragraphs (a) and (b) of sub-paragraph (3) are the same-
 
 
    (a) the averaging period within which the balancing period fell ends at the end of the balancing period, and
 
    (b) no balancing credit or debit is carried forward to the next balancing period.
      (6) Sub-paragraphs (7) and (8) apply if the total mentioned in sub-paragraph (3)(b) exceeds that mentioned in sub-paragraph (3)(a).
 
      (7) Where the end of the balancing period is by virtue of sub-paragraph (2)(c) (averaging period ends after 2 years) the end of an averaging period, the supplier is liable to account to the Commissioners for an amount equal to the amount that would be payable by way of levy on a taxable supply that-
 
 
    (a) is made at the end of the balancing period,
 
    (b) is a supply of a quantity of electricity equal to the difference between the two totals, and
 
    (c) is treated as a reduced-rate supply to the extent (if any) that the exempt renewable supplies made by the supplier in the averaging period would have been reduced-rate supplies if they had not been made on the basis that they were exempt.
  For the purposes of this Schedule, the amount for which the supplier is liable to account shall be treated as an amount of levy for which he is liable to account for an accounting period ending at the end of the balancing period.
 
      (8) Where sub-paragraph (7) does not apply, a balancing debit equal to the difference between the two totals is carried forward to the next balancing period.
 
 
Regulations to avoid double charges to levy
     20. - (1) The Commissioners may by regulations make provision for avoiding, counteracting or mitigating double charges to levy.
 
      (2) For the purposes of this paragraph there is a double charge to levy where-
 
 
    (a) a supply of a taxable commodity ("the produced commodity") is a taxable supply, and
 
    (b) a taxable commodity used directly or indirectly in producing the produced commodity has been the subject of a taxable supply.
      (3) Regulations under this paragraph may, in particular, make provision for a supply of a taxable commodity to be wholly or to any extent-
 
 
    (a) exempt from the levy, or
 
    (b) deemed not a supply of the commodity.
      (4) The provision mentioned in sub-paragraph (3) includes provision for exceptions to any of sub-paragraphs (1) to (3) of paragraph 22 or paragraph 23(3).
 
      (5) The powers conferred by this paragraph are in addition to the powers to make provision by tax credit regulations in relation to any such case as is mentioned in paragraph 61(1)(g).
 
 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2000
Prepared 30 June 2000