Finance Act 2011

Section 78

SCHEDULE 20 U.K. Supplies of commodities to be used in producing electricity

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

2 U.K. In paragraph 6 (supplies of gas), after sub-paragraph (1) insert—

“(1A) In relation to a supply which is within sub-paragraph (1B) but not sub-paragraph (1C)—

(a) in sub-paragraph (1)(a) the reference to a gas utility is to be read as including a reference to an unregulated gas supplier (within the meaning of paragraph 151), and

(b) in relation to a supply made by an unregulated gas supplier—

(i) sub-paragraph (1) has effect as if paragraph (b)(ii) were omitted, and

(ii) in paragraph 40(2)(b) the reference to a utility is to be read as including a reference to an unregulated gas supplier.

(1B) A supply is within this sub-paragraph if it is a supply of any gas to a person to be used by that person in producing electricity.

(1C) A supply is within this sub-paragraph if it is a supply of any gas to a person who intends to cause the gas 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.”

3 (1) Paragraph 14 (exemption: supplies (other than self-supplies) to electricity producers) is amended as follows. U.K.

(2) In sub-paragraph (1), for “a taxable commodity” substitute “ electricity ”.

(3) In sub-paragraphs (1)(a), (2)(b) and (3)(b), for “commodity” substitute “ electricity ”.

4 U.K. In paragraph 21 (regulations to avoid double charges to levy), after sub-paragraph (2) insert—

“(2A) In sub-paragraph (2)(b) “taxable supply” does not include a taxable supply subject to the carbon price support rates (see paragraph 42A).”

5 U.K. In paragraph 42 (amount payable by way of levy), before sub-paragraph (2) insert—

“(1B) Sub-paragraph (1) does not apply to a taxable supply subject to the carbon price support rates (see paragraph 42A).”

6 U.K. After paragraph 42 insert—

“42A (1) This paragraph applies if a taxable supply is subject to the carbon price support rates.

(2) A supply is subject to the carbon price support rates if—

(a) it is a supply of a taxable commodity, apart from electricity, to a person to be used by that person in producing electricity, and

(b) it is not within sub-paragraph (3).

(3) A supply is within this sub-paragraph if it is a supply of a taxable commodity to a person who intends to cause the commodity 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.

(4) The amount payable by way of levy on the taxable supply is the amount ascertained by applying the relevant carbon price support rate; and the levy payable on a fraction of a quantity of a commodity is that fraction of the levy payable on that quantity of the commodity.

(5) The carbon price support rates are as follows.

Taxable commodity supplied	Carbon price support rate
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility	£0.00091 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state	£0.01460 per kilogram
Any other taxable commodity (apart from electricity)	£0.01188 per kilogram

(6) The Commissioners may by regulations make provision for giving effect to this paragraph.

(7) Regulations under sub-paragraph (6) may, in particular, include provision for determining whether or not a taxable supply is subject to the carbon price support rates.”

7 U.K. In paragraph 101 (civil penalties: incorrect certificates), in sub-paragraph (2)(a)—

(a) omit the “or” after sub-paragraph (ii), and

(b) omit the “and” at the end of sub-paragraph (iv) and after that sub-paragraph insert “or

(v) a taxable supply (or taxable supplies) subject to the carbon price support rates, and”.

8 (1) Subject to what follows, the amendments made by paragraphs 1 to 7 above have effect in relation to supplies treated as taking place on or after 1 April 2013. U.K.

(2) Sub-paragraph (3) applies to a supply to a person (“the customer”) which—

(a) is of the description mentioned in paragraph 26(1)(b) of Schedule 6 to FA 2000 (gas in gaseous state), and

(b) is not treated as taking place before 23 March 2011.

(3) The amendments made by paragraphs 1 to 7 above have effect in relation to the gas supplied so far as it is actually supplied to the customer on or after 1 April 2013.

9 (1) This paragraph applies for the purposes of Schedule 6 to FA 2000 if— U.K.

(a) an invoice is issued, or a payment is received, before 1 April 2013 in respect of the supply to a person (“the customer”) of a taxable commodity,

(b) the supply is not of the description mentioned in paragraph 26(1)(b) of Schedule 6 (gas in gaseous state),

(c) if the supply were to be treated as taking place on 1 April 2013, it would be a taxable supply subject to the carbon price support rates (see paragraph 42A of Schedule 6 as inserted by paragraph 6 above),

(d) a quantity of the taxable commodity is not delivered to the customer before 1 April 2013, and

(e) the invoicing or payment in advance of delivery is not acceptable normal practice.

(It does not matter whether the invoice mentioned in paragraph (a) is, or is not, a climate change levy accounting document.)

(2) If the supply would otherwise be treated as taking place before 1 April 2013, and not be a taxable supply, the supply is treated as taking place on that date.

(3) The quantity of the taxable commodity treated as supplied on 1 April 2013 is the quantity to which sub-paragraph (1)(d) applies.

(4) For the purposes of this paragraph invoicing or payment in advance of delivery is “acceptable normal practice” if—

(a) the supply is of a kind in the case of which it is normal practice for invoices to be issued, or payments to be made, in respect of taxable commodities before they are delivered to the person (“the customer”) to whom they are being supplied,

(b) the practice does not involve issuing invoices, or making payments, more than 15 weeks in advance of the taxable commodities, in respect of which the invoice is issued or payment is made, being delivered to the customer, and

(c) the advance invoicing or payment is in accordance with that practice.

(5) This paragraph does not apply in relation to supplies treated as taking place before 23 March 2011.