Climate Change Levy UK 2026: HMRC rates and reliefs

Last updated: Thursday 29 October 2026

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.

This guide explains the Climate Change Levy for businesses in 2026 in plain English, with links to the GOV.UK rate tables.

SwitchSquid may earn a commission from the supplier if you sign a business energy contract through our quote form. It does not change the price you are quoted.

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

Source: GOV.UK — CCL changes from 1 April 2026 and CCL rates guidance.

Reduced rates for Climate Change Agreement holders

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 rise in cost when the main rate rises.

Procurement checklist for SMEs

1. Find the CCL line on a recent invoice (often shown as a p/kWh or £ amount beside consumption).

2. Confirm whether you hold a Climate Change Agreement and that the supplier applies the reduced rate correctly.

3. When tendering, ask brokers to quote unit rates including CCL treatment so “cheap” offers are not missing the levy.

4. Separate CCL from VAT in your internal model — they stack differently.

5. Use SwitchSquid’s business energy form to start a like-for-like quote with your MPAN/MPRN and usage.

Worked CCL cost example for a small business

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 matters: it is real money 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, use HMRC guidance and a qualified adviser rather than a general guide. SwitchSquid helps you compare supply contracts; we do not file CCL returns.

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 a clear split between business and non-business use, so take advice. 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 runs past 1 April 2027, build the published April 2027 main rates into the renewal model before you sign. A quote that looks sharp on 2026/27 rates can cost more once CCL rises. Ask for the cost at both the April 2026 and April 2027 rates when the supply period crosses 1 April 2027.

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.

FAQ

What is the Climate Change Levy rate for electricity in 2026?

From 1 April 2026 the main rate is £0.00801 per kWh, or 0.801p per kWh, according to HMRC’s published rates. It is charged on top of your unit rate and shown on business energy bills.

Is gas charged at the same CCL rate as electricity?

Yes. From 1 April 2026 the main rate for both natural gas and electricity is £0.00801 per kWh. The reduced rates for Climate Change Agreement holders differ, at 8% of the main rate for electricity and 11% for gas.

Do households pay the Climate Change Levy?

No. Domestic supplies are outside the main CCL charge. This guide is for business and other non-domestic premises.

What is CCL relief?

Businesses with a Climate Change Agreement pay reduced rates set as fixed percentages of the main rates. Other exemptions apply to specific uses under HMRC rules. Check GOV.UK guidance before you claim one.

Will CCL rates rise again in 2027?

GOV.UK’s rate table lists main rates from 1 April 2027 of £0.00827 per kWh for electricity and gas. Future rates still depend on legislation, so check the table before you sign a multi-year contract.

Where can I get a business energy quote?

Use the SwitchSquid business energy quote form on this page. Have your meter numbers, yearly usage and contract end date ready, and ask for CCL to be shown as its own line on each quote.