Last updated: Friday 18 September 2026 (Europe/London).
Next update: when HMRC revises Climate Change Levy main rates (next scheduled step listed toward April 2027 on gov.uk).
By: Switch Editorial Team, Switch Squid Ltd
From 1 April 2026, HMRC’s Climate Change Levy (CCL) main rates are £0.00801 per kWh for electricity and for natural gas, with LPG at £0.02175 per kg and other taxable commodities at £0.06264 per kg. Climate Change Agreement holders pay reduced percentages of those main rates (8% electricity, 11% gas, 23% LPG, 11% other). CCL is a business energy tax — domestic supplies are generally outside the main charge.
I am Switch. This guide explains Climate Change Levy business 2026 in SME English with gov.uk citations. The primary CTA is SwitchSquid’s own business energy quote form — never MoneySuperMarket.
Compare business energy quotes on SwitchSquid →
What CCL is (and is not)
Climate Change Levy is a UK tax on supplies of taxable commodities to business and public-sector users, introduced under the Finance Act 2000 framework and updated in HMRC rate tables. It is not VAT, not the Energy Price Guarantee, and not the domestic energy price cap. Households on domestic tariffs should not treat this page as a home bill explainer.
Main rates from 1 April 2026
| Taxable commodity | Main rate from 1 Apr 2026 | Approx p/kWh (where applicable) |
|---|---|---|
| Electricity | £0.00801 per kWh | 0.801 p/kWh |
| Natural gas | £0.00801 per kWh | 0.801 p/kWh |
| LPG | £0.02175 per kg | n/a (per kg) |
| Other taxable commodities (solid fuels) | £0.06264 per kg | n/a (per kg) |
Source: GOV.UK — CCL changes from 1 April 2026 and CCL rates guidance.
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Reduced rates for Climate Change Agreement holders
| Commodity | % of main rate from 1 Apr 2026 | Illustrative reduced £/kWh |
|---|---|---|
| Electricity | 8% | £0.0006408 / kWh (0.06408 p) |
| Natural gas | 11% | £0.0008811 / kWh (0.08811 p) |
| LPG | 23% | 23% of £0.02175/kg |
| Other taxable commodities | 11% | 11% of £0.06264/kg |
Percentages come from HMRC’s published reduced-rate table. The illustrative p/kWh maths multiplies the main rate by the percentage — confirm on your invoice coding and CCA paperwork rather than treating this as a tax computation for filing.
Who pays CCL
In broad terms, CCL applies to taxable supplies of energy products to business users. Domestic use and certain non-business charity use sit in excluded categories under HMRC manuals. Exemptions and reliefs also exist for specific industrial processes, transport uses, and other statutory cases — always check current HMRC guidance rather than a blog bullet when you structure supply contracts.
If you are a microbusiness on a deemed or out-of-contract rate, ask your supplier whether CCL is itemised on the invoice and whether any relief applies. Do not assume a domestic-looking bill format means CCL is absent.
Why CCL rates moved in April 2026
HMRC’s tax information note explains that main rates for electricity, gas and solid fuels rise in line with RPI from 1 April 2026, while the LPG main rate remains frozen. Reduced-rate percentages stay fixed, so CCA participants see a proportional cash rise when the main rate rises.
Procurement checklist for SMEs
- Find the CCL line on a recent invoice (often shown as a p/kWh or £ amount beside consumption).
- Confirm whether you hold a Climate Change Agreement and that the supplier applies the reduced rate correctly.
- When tendering, ask brokers to quote unit rates including CCL treatment so “cheap” offers are not missing the levy.
- Separate CCL from VAT in your internal model — they stack differently.
- Use SwitchSquid’s business energy form to start a like-for-like quote with your MPAN/MPRN and usage.
FAQ
What is the Climate Change Levy rate for electricity in 2026?
From 1 April 2026 the main rate is £0.00801 per kWh (0.801 p/kWh) per HMRC/GOV.UK.
Is gas the same rate as electricity?
Yes for the main rate from 1 April 2026 — both are £0.00801 per kWh. Reduced-rate percentages differ (8% elec vs 11% gas for CCA holders).
Do households pay CCL?
Domestic supplies are generally outside the main CCL charge. This page is for business and non-domestic contexts.
What is CCL relief?
CCA participants can pay reduced rates set as fixed percentages of the main rates. Other exemptions exist in HMRC rules for specific uses — verify on gov.uk before claiming.
Will rates rise again in 2027?
GOV.UK’s CCL rates table lists further main rates from 1 April 2027 (e.g. electricity/gas £0.00827 per kWh in the published schedule). Treat future years as subject to legislation updates.
Where should I get a business energy quote?
Use SwitchSquid’s own business energy form — not a domestic MSM journey.
Compare business energy quotes on SwitchSquid →
Worked CCL cash sketch for an SME
A workshop using 80,000 kWh of electricity a year at the main rate pays roughly 80,000 × £0.00801 = £640.80 in CCL on electricity alone before any CCA reduction. The same volume under an electricity CCA reduced rate at 8% of main is about 80,000 × £0.0006408 ≈ £51.26. That gap is why CCA paperwork is not a bureaucratic hobby — it is real cash if you qualify.
Gas follows the same main rate per kWh from April 2026, so a site with heavy process gas sees a similar line-item swing when rates index with RPI.
Invoice hygiene
Ask suppliers to show CCL as its own line, not rolled into a mysterious “climate” or “environmental” bundle without a rate. When you tender annually, demand last year’s CCL £ total and the p/kWh assumption. Brokers who cannot separate CCL from the wholesale unit rate make apples-to-apples comparisons impossible.
CCL vs other green policy costs
Do not confuse CCL with Renewables Obligation legacy costs, FiT levies, or ETS exposure on larger sites. Those sit in different parts of a non-domestic bill. This page only covers CCL main/reduced rates from HMRC’s published tables.
When to talk to an accountant
If you are applying for a Climate Change Agreement, claiming an exemption, or disputing a supplier’s CCL coding, stop DIY-ing from a blog. Use HMRC guidance and a qualified adviser. SwitchSquid helps you compare supply contracts; we do not file CCL returns.
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Broker conversation script
When you speak to a broker or supplier sales desk, ask four questions in this order: (1) Is CCL included in the quoted unit rate or shown separately? (2) Which main or reduced rate period does the quote assume? (3) If we hold a CCA, have you applied the correct percentage? (4) What happens to CCL if we roll onto a deemed or out-of-contract rate later?
Write the answers into the quote comparison sheet beside kWh volume. A 0.1 p/kWh “saving” that forgets CCL coding is not a saving. For half-hourly and larger sites, fold this into the same procurement pack as capacity charges and metering — see our half hourly meter business energy guide for metering context.
April 2026 vs April 2027 — do not mix tables
GOV.UK’s CCL rates page lists multiple April columns. Quotes signed in March 2026 may still reference the prior main rates until the supply period crosses 1 April 2026. When you renew for a 2026/27 contract year, insist the broker’s model uses £0.00801/kWh (or the correct reduced percentage) from the April 2026 column — not a stale 2025 figure copied from last year’s spreadsheet.
The April 2027 column already shows further RPI-linked steps for electricity and gas on the published schedule. Use it for multi-year models only, and re-check legislation before you treat it as locked.
Public sector and charity notes
Some charity non-business use is excluded from CCL under HMRC categories, while business activity inside the same organisation may still be taxable. Mixed-use sites need clean apportionment — another reason this is not a DIY tax blog. Procurement teams should flag mixed-use meters to advisers before signing a multi-year supply deal that assumes full reduced rates.
Keep a one-page internal note: main rate table date, whether a CCA applies, last invoice’s CCL £, and the broker’s inclusion rule. That note saves hours when staff change mid-tender.
Linking CCL to your switch timeline
If your fixed business contract ends in Q1 2026, bake the April 2026 main rates into the renewal model before you sign. A quote that looks sharp on March unit rates can drift once CCL indexes. Ask for a sensitivity table at both the March and April rate columns when the supply period crosses 1 April.
If your invoice already shows CCL at the old rate after 1 April 2026, raise a billing query with the supplier quoting the GOV.UK April 2026 table — do not wait for the next renewal cycle.
Sources: GOV.UK CCL rates guidance; CCL rates from 1 April 2026 TIIN — opened 18 Sep 2026.
