Businesses must act fast to take advantage of window to save up to 90% of Climate Change Levy costs

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Businesses must act now to grasp the golden opportunity to save on skyrocketing energy costs and place their operations on the path to carbon neutrality by entering into the government’s reopened Climate Change Agreement (CCA) Scheme before it closes on March 31. The scheme was introduced in 2013 to some fanfare but recently enjoyed a very muted reopening in January 2022. As such it has been missed by thousands of businesses and financial directors, particularly midcap organisations who are focussing on the traditional end-of-tax year and audit reporting.

CCAs are voluntary agreements made between UK businesses and the Environment Agency to reduce emissions for which businesses receive a reduction on the CCL, a tax added to electricity and fuel bills. They provide businesses with a unique win-win scenario of reducing carbon emissions by meeting energy efficiency targets, and earning up to 90% back on their Climate Change Levy (CCL) for the next three years.

For energy intensive industries such as manufacturing, construction, agriculture and automotive, not only can the CCA scheme add valuable cash to the bottom line, it can provide a vital basis to begin voluntary and statutory reporting such as Streamlined Energy and Carbon Reporting (SECR) which will fast become mandatory for medium and smaller businesses in the years ahead.

In the face of highly prohibitive electricity, gas and fuel prices that have jumped over 50% in the last year, there has never been a better time for businesses to consider entering into a CCA to save on energy costs and future-proof the finance prosperity of their organisations. I would urge business owners across the country to contact their industry bodies and accountancy firms to evaluate whether they meet the criteria before the very tight window expires at the end of the month.