The Climate Change Levy (General) Regulations 2001

Interpretation of Regulations 6B to 6G

6A

In regulations 6B to 6G—

• “authorised person” means a person who has been authorised by the Commissioners under regulation 6B(1), and “authorised” and “authorisation” shall be construed accordingly;

• “current accounting year” means the period of 12 months commencing on a date indicated by the Commissioners in their notification of authorisation of a person, or while a person remains authorised, the most recent anniversary thereof, and is an accounting period within the meaning of regulation 3;

• “the scheme” means the annual accounting scheme established by regulations 6B to 6G;

• “transitional accounting period” means the period commencing on the first day of a person’s accounting period in which the Commissioners authorise him to use the scheme, and ending on the day immediately preceding the first day of that person’s first current accounting year, and is an accounting period within the meaning of regulation 3.

Annual accounting scheme

6B

• (1) The Commissioners may, subject to the requirements in paragraph (2) below and in regulations 6C to 6G, authorise a registered person to pay and account for CCL by reference to any transitional accounting period, and any subsequent current accounting year, at such times, and for such amounts, as may be determined in accordance with the scheme.

• (2) The Commissioners shall not be required to authorise a person under regulation 6B(1) unless an application is made to the Commissioners in such form and in such manner as the Commissioners may prescribe in a published notice.

Admission to the scheme

6C

• (1) A person shall be eligible to apply for authorisation if—

• (a) he has been registered for at least 12 months at the date of his application for authorisation;

• (b) he has reasonable grounds for believing that the amount of CCL on taxable supplies made or to be made by him in the period of 12 months beginning on the date of his application for authorisation will not exceed £2,000;

• (c) his registration is not in the name of a representative member of a group of two or more bodies corporate under paragraph 56(2) of Schedule 6 to the Act;

• (d) his registration is not in the name of a division under paragraph 56(3) of Schedule 6 to the Act; and

• (e) he has not in the 12 months preceding the date of his application for authorisation ceased to operate the scheme.

• (2) The Commissioners may refuse to authorise a person where they consider it necessary to do so for the protection of the revenue.

Cessation of authorisation

6D

• (1) An authorised person shall continue to account for CCL in accordance with the scheme until he ceases to be authorised.

• (2) An authorised person ceases to be authorised when—

• (a) at the end of any transitional accounting period or current accounting year the amount of CCL on taxable supplies made by him during that period or year has exceeded £2,000;

• (b) his authorisation is terminated in accordance with regulation 6E;

• (c) he—

• (i) becomes insolvent and ceases to trade, other than for the purpose of disposing of stocks and assets,

• (ii) ceases business or ceases to be registered,

• (iii) dies, becomes bankrupt or incapacitated;

• (d) he ceases to operate the scheme of his own volition.

6E

• (1) The Commissioners may terminate an authorisation in any case where—

• (a) a false statement has been made by or on behalf of an authorised person in relation to his application for authorisation;

• (b) an authorised person fails to make by the due date a return for his transitional accounting period or current accounting year;

• (c) an authorised person fails to make by the due date any payment shown as due on any return for his transitional accounting period or current accounting year;

• (d) the Commissioners receive notification that the amount of CCL on taxable supplies in a transitional accounting period or current accounting year will exceed £2,000;

• (e) at any time during an authorised person’s transitional accounting period or current accounting year they have reason to believe that the amount of CCL on taxable supplies during the period or, as the case may be, year will exceed £2,000;

• (f) it is necessary to do so for the protection of the revenue;

• (g) an authorised person has not, in relation to a return made by him prior to authorisation, paid to the Commissioners all such sums shown as due thereon; or

• (h) an authorised person has not, in relation to any assessment made under Schedule 6 to the Act, paid to the Commissioners all such sums due as shown thereon.

• (2) Where an authorised person has reason to believe that the amount of CCL on taxable supplies made by him during a transitional accounting period or current accounting year will exceed £2,000, he shall within 30 days notify the Commissioners in writing.

6F

• (1) The date from which an authorised person ceases to be authorised shall be—

• (a) where regulation 6D(2)(a) applies, the day following the last day of the relevant transitional accounting period or current accounting year;

• (b) where regulation 6D(2)(b) applies, the day on which the Commissioners terminate his authorisation;

• (c) where regulation 6D(2)(c) applies, the day on which any one of the events mentioned in that paragraph occurs; or

• (d) where regulation 6D(2)(d) applies, the date on which the Commissioners are notified in writing of the authorised person’s decision to cease using the scheme.

• (2) Where an authorised person ceases to be authorised, he or as the case may be, his representative, shall—

• (a) if his authorisation ceases before the end of his transitional accounting period or current accounting year, make a return within one month of the date specified in paragraph (1)(b), (1)(c) or (1)(d) above, together with any payment due to the Commissioners in respect of his liability for CCL for that part of the period or year arising before the date he ceased to be authorised; or

• (b) if his authorisation ceases at the end of his transitional accounting period or current accounting year, make a return together with any payment due to the Commissioners in respect of his liability for CCL in accordance with regulations 4, 5 and 6;

and, in either case, from the day following the day on which he ceases to be authorised, account for and pay CCL as provided for otherwise than by the scheme.

6G

The Commissioners may vary any one of the amounts specified in regulations 6C(1)(b), 6D(2)(a) and 6E(1)(d) and (e) and (2) by prescribing a new amount in a published notice.

Records

Bad debts: entitlement to tax credit

Other tax credits: entitlement

Tax credits: general

Bad debts: supplementary provisions

Form and manner of claim for repayment of overpaid CCL if no person entitled to tax credit

Tax credits and other repayments: unjust enrichment—reimbursement arrangements to be disregarded

Corrections to CCL returns

Set-off

Special rules for excluded, exempt, half-rate and reduced-rate supplies

PART IV(A) — Combined heat and power stations

Interpretation of Part IV(A)

51A

• (1) For the purposes of this Part and Schedules 1 to 3–

• “authorised person” (except for the purposes of Schedule 2, paragraph 7(a)) refers to a person authorised by the relevant Authority;

• “CHP declaration contract” refers to the contract mentioned in paragraph 20A(1)(b) of the Act;

• “CHPQA” refers to issue 7 of the Combined Heat and Power Quality Assurance Standard prepared by the Department for Business, Energy and Industrial Strategy (December 2018);

• “CHPQA certificate” means a certificate issued in respect of a combined heat and power station following assessment of the station against criteria in the CHPQA;

• “CHP Relief Condition” refers to paragraphs 2 to 7 and paragraph 12 of Schedule 2;

• “exemption certificate” refers to a full-exemption certificate or a part-exemption certificate (see paragraphs 148(2) and 148(3) of the Act and the Climate Change Levy (Combined Heat and Power Stations) Exemption Certificate Regulations 2001);

• “fully exempt CHP” refers to a fully exempt combined heat and power station (see paragraph 148(2) of the Act);

• “indirect supplies” refers to supplies in relation to which provision is made by paragraph 20A(1) of the Act (exemption for supply made by electricity utility of CHP electricity);

• “MWh” is an abbreviation for megawatt-hour;

• “operator” refers to the person who operates a station or who generates or produces electricity in that station;

• “outputs” or “output” refers to the meaning given by paragraph 148(9) of the Act (electricity or motive power produced in a station, and (a) heat or steam, or (b) air, or water, that has been heated or cooled);

• “partly exempt CHP” refers to a partly exempt combined heat and power station (see paragraph 148(3) of the Act);

• ...

• “QPO electricity” means qualifying power output electricity and refers to electricity that–has been produced in a fully exempt CHP;has been produced in a partly exempt CHP and supplied from it without causing the limit referred to in paragraph 16(2) of the Act to be exceeded and;in either case, has been produced before 1st April 2013;

• “station” refers to a fully or partly exempt CHP;

• “relevant Authority” refers to the Gas and Electricity Markets Authority or, in relation to electricity produced or supplied in Northern Ireland or produced in the Republic of Ireland, the Director General of Electricity Supply for Northern Ireland.

• (2) In the case of electricity produced in a given station after 21st July 2005, this Part and Schedule 2 (and the related penalties provided for by regulation 60(1)(ha) and regulation 60(1)(hb)) only apply if at least some of that electricity is supplied otherwise than from that station (indirect supplies, see paragraph 20A(2) of the Act).

Certification of electricity produced in a combined heat and power station

51B

• (1) The relevant Authority must certify QPO electricity in accordance with this Part and Schedule 2.

• (2) The relevant Authority must only certify on the basis of the most accurate figures for electricity produced in an individual station that the station’s operator makes known to the Authority.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) The station’s operator must only make known figures for the purposes of paragraph (2) that are made in accordance with the metering requirements of the CHPQA.

• (6) The relevant Authority must only certify for the purposes of paragraphs (1) and (2) on the basis that—

• (a) each quantity of electricity produced by an individual station is referable to the Annual Operation in which it is produced, and

• (b) every such quantity in a given Annual Operation comprises the same relative proportions of QPO electricity and non-QPO electricity.

This requirement is subject to the other provisions of this Part and Schedule 2 (non-certification, restricting validity to indirect supplies, reconciliation).

“Annual Operation” has the same meaning as in regulations 2(3), 3(2), 4 and 6(1) of the Climate Change Levy (Combined Heat and Power Stations) Regulations 2005 (namely, 1st January to 31st December).

• (7) The relevant Authority must not certify any electricity produced in a station when no exemption certificate is in force for that station.

• (8) Where the relevant Authority certifies under paragraph (1), it must issue a levy exemption certificate (“CHP LEC”) as respects that electricity.

The relevant Authority must both certify QPO electricity in accordance with paragraphs (1), (2), ... (6) and (7) and issue the relevant CHP LEC no later than the end of the third month following the end of the month in which the electricity is produced.

Whilst the relative proportions mentioned in paragraph (6)(b) are unknown, the relevant Authority must use a reasonable estimate of what those relative proportions will be.

If the relevant Authority must investigate further whether the electricity in question is “QPO electricity”, it must certify the QPO electricity and issue the relevant CHP LEC no later than the end of the month following the month in which that investigation ought reasonably to have been concluded.

• (9) A CHP LEC must be regarded for all purposes of this Part and Schedule 2 as only relating to the actual electricity in relation to which it was issued.

• (10) Each CHP LEC must carry a unique identifying reference.

51C

• (1) The relevant Authority must neither certify electricity nor issue a CHP LEC as respects any electricity under any of the following circumstances.

• (2) The first circumstance is where the quantity of electricity in question is less than 1 MWh.

• However the relevant Authority may aggregate or disaggregate such quantities relating to the same station, certifying each complete MWh as appropriate.

• (3) The second circumstance is where the relevant Authority is not satisfied that the CHP LEC, if issued, would represent electricity consumed or to be consumed in the United Kingdom.

• For this purpose, the relevant Authority may have regard in particular to whether any part of that electricity is or may be allocated by the operator or a supplier for consumption outside the United Kingdom.

• (4) The third circumstance is any one or more of the following–

• (a) the operator not providing the relevant Authority with such information, particulars, records and declarations as the relevant Authority may require for the purposes of this Part or Schedule 2;

• (b) the operator not providing the relevant Authority with any updated readings the relevant Authority may require from any relevant electricity meter;

• (c) any authorised person not being granted, on request, access at any reasonable time to the station in question;

• (d) any authorised person not being permitted, on request and having been granted access to the station–

• (i) to inspect or test anything that is at the station and connected with the production or supply of any relevant electricity, and

• (ii) to inspect any records that are at that station and so connected;

• (e) any authorised person not, on request, being granted access to any premises at any reasonable time to take updated readings from any relevant electricity meter;

• (f) the operator having been notified of an assessment to a civil penalty or to penalty interest in relation to an event subject to this Part or Schedule 2 and, irrespective of any relevant review or appeal, that amount being unrecovered (for assessments, see paragraphs 106 and 111 of the Act; for review and appeal, see Part XI of the Act);

• (g) any one or more of sub-paragraphs (a) to (e) not being satisfied within such time as the relevant Authority considers reasonable for the purpose in question;

• (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51D

• (1) If the relevant Authority becomes aware that it has issued a CHP LEC in relation to–

• (a) production when no exemption certificate was in force for the relevant station, or

• (b) production in relation to which there is a breach of regulation 51B(5) (metering standards),

it shall as soon as practicable both restrict the validity of that CHP LEC to indirect supplies (see regulations 51I to 51M) and notify that restriction to the person to whom it was issued (see regulation 51B(8)).

• (2) A CHP LEC so restricted is referred to in the remainder of this Part and in Schedule 2 as a “restricted CHP LEC” and any other CHP LEC is referred to as an “unrestricted CHP LEC” (but see also Schedule 2 paragraphs 8(3), 11(5) and 13(2)).

51E

• (1) The relevant Authority shall, in carrying out its functions under this Part, have regard to the proper administration of CCL.

• (2) The relevant Authority shall in particular, and as appropriate, act in accordance with and have regard to Schedule 2 paragraphs 8, 10 and 11.

• (3) The relevant Authority must keep a record of each CHP LEC for 6 years from the date of issue.

• The record must show the person to whom it was issued, whether the CHP LEC is unrestricted or restricted, and any indirect supply of the electricity to which the CHP LEC is relevant (see regulation 51J(3)) .

CCL treatment dependent on certification

51F

Electricity shall not be regarded as QPO electricity for the purposes of regulation 4(1)(a) of the Climate Change Levy (Electricity and Gas) Regulations 2001 (direct supplies of electricity by utility from fully exempt CHP) unless it remains the subject of an unrestricted CHP LEC.

51G

• (1) Electricity shall not be regarded as QPO electricity for any of the following purposes unless it remains the subject of an unrestricted CHP LEC–

• (a) the outputs of a station referred to in paragraph 15(1) of the Act (supplies to CHP exempt if to be used in producing station’s outputs);

• (b) the electricity referred to in paragraphs 16(1)(a) and 17(1A) of the Act (supplies from partly exempt CHP are exempt from CCL if specified limit not exceeded; self-supplies from station exempt if producer not auto-generator).

• (2) Each of the following exemptions shall only be given effect subject to the CHP Relief Condition (see regulation 51H(1)) being fulfilled as follows–

• (a) for paragraph 15(1) of the Act, the Condition must be fulfilled in relation to any QPO electricity that is a relevant output for the purposes of that paragraph (supplies to CHP exempt if for use in producing station’s outputs);

• (b) for paragraph 16(2) of the Act, the Condition must be fulfilled in relation to any QPO electricity referred to in that paragraph (supplies from partly exempt CHP are exempt from CCL if specified limit not exceeded);

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) for paragraph 17(1A) of the Act, the Condition must be fulfilled in relation to any QPO electricity that is electricity for the purposes of that paragraph (self-supplies from fully or partly exempt CHP exempt from CCL if producer not auto-generator).

51H

• (1) Schedule 2 has effect and, accordingly, the CHP Relief Condition binds any person who–

• (a) represents to a supplier entitlement to the exemption from CCL provided for by paragraph 15(1) of the Act (supplies of taxable commodities to stations, and see also paragraph (4));

• (b) does not account for CCL on a supply because an exemption is provided for by paragraph 16(2) or 17(1A) of the Act (supplies from partly exempt CHP and self-supplies from fully or partly exempt CHP);

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Paragraph 1 and regulations 51F and 51G only apply in relation to supplies that are treated as taking place on or after 1 April 2003 (see paragraphs 25 to 39 of the Act, time of supply).

• (3) Regulations 51F and 51G apply in addition to regulation 60(1)(hb) (penalties relating to CHP Relief Condition)).

• (4) Part III and Schedule 1 apply independently of this Part (certification, etc. in relation to excluded, exempt ... and reduced-rate supplies).

Supplies pursuant to CHP declaration contract

51I

Electricity is only “CHP electricity” for the purposes of paragraphs 20A and 20B of the Act (exemption for indirect supplies) if it remains the subject of an unrestricted CHP LEC or a restricted CHP LEC.

51J

• (1) Any electricity that is the subject of a CHP LEC shall be regarded as never having been CHP electricity capable of being the subject of exempt CHP supplies for the purposes of paragraph 20A of the Act (indirect supplies) if one or more of the conditions prescribed in the following paragraphs are not fulfilled.

• (2) The electricity must only be allocated to a supply to a person who intends it to be consumed in the United Kingdom.

• (3) Should the electricity be allocated to some supply pursuant to some CHP declaration contract, the supplier must inform the relevant Authority of this fact and of the relevant CHP LEC’s unique identifying reference (see regulation 51B(10)).

• (4) At any time up to 6 years after the day the electricity is produced, any supplier of that electricity must on request and within such time as the relevant Authority considers reasonable provide that Authority with readily legible records relating to and detailing–

• (a) the supplies that supplier received or made of that electricity,

• (b) the relevant suppliers or recipients of any supplies that supplier received or made of that electricity,

• (c) the relevant CHP LECs and, if different from the relevant supplier or recipient, the identity of any person from or to whom entitlement to the CHP LEC was obtained or transferred.

51K

Supplies shall not be regarded as exempt CHP supplies for the purposes of paragraph 20A of the Act unless–

• (a) the supplier provides the recipient with a written notice for the duration of the CHP declaration contract, updated as necessary, setting out how to identify those supplies of electricity that–

• (i) are or will be made under the CHP declaration contract, and

• (ii) are or will be referred to on a climate change levy accounting document (or an invoice) issued in respect of those supplies;

• (b) the supplier retains a copy of each such notice for 6 years starting from the day after it is provided to the recipient;

• (c) the supplier provides a copy of any such notice to the Commissioners no later than 14 days after the Commissioners request one.

51L

The exemption provided for by paragraph 20A(1) of the Act (indirect supplies) shall only be given effect if the supplier, and each other person (if any) who is an operator in relation to any CHP electricity allocated by the supplier to supplies under the CHP declaration contract in question, has delivered a copy of the notice referred to in paragraph 20A(1)(d) of the Act (agreement to fulfil conditions) to the relevant Authority.

51M

• (1) In a case described in paragraph (3), a supply of electricity is exempt from the levy chargeable under paragraph 5(1) of the Act, and electricity is “CHP electricity” for the purposes of paragraphs 20A and 20B of the Act, only if paragraph (2) is satisfied in relation to that electricity.

• (2) The electricity must not have been produced when the station that produced it has received State aid exceeding any relevant limit in the “Community guidelines on State aid for environmental protection (2001/C 37/03).

• (3) For the purposes of paragraph (1), the case is where relevant separation agreement law applies (as defined in section 7C(3) of the European Union (Withdrawal) Act 2018).

SCHEDULE 2 — The CHP Relief Condition

Introduction

1

These obligations are for the purpose of ensuring the correct application of CCL to the outputs of a fully exempt or a partly exempt combined heat and power station which are produced before 1st April 2013.

CHP LEC and outputs record

2

A person to whom regulation 51H(1) applies must for the purposes of that regulation keep and maintain a discrete, proper, accurate and true record (the “CHP outputs record”) of–

• (a) any relevant supply of electricity constituting an output of the station in question for the purposes of paragraph 15(1) of the Act (supplies to stations);

• (b) any relevant supply in relation to which CCL is not accounted for because of an exemption provided for by paragraph 16(2) 17(1A) of the Act (supplies from partly exempt CHP and self-supplies);

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

• (1) That record must also identify separately, according to the following categories, each MWh of QPO electricity that is an output of the station in question and allocate to each such MWh a CHP LEC issued in respect of QPO electricity.

• (2) The categories are–

• (a) self-supplies of the electricity;

• (b) supplies made to the person who consumes the electricity;

• (c) supplies made to a person who makes a supply of the electricity.

• (3) A CHP LEC (or any part of it) that remains allocated to a supply must not be allocated to any other supply.

• (4) The allocation must be made no later than the end of the second month following the one in which the CHP LEC is issued.

• (5) Any restricted CHP LEC must be identified as such in the record no later than the 30th day after the one on which the notification that the relevant Authority has restricted its validity to indirect supplies is received (see regulation 51D and paragraph 11(5)).

4

That record must also show the quantity of all electricity that is an output of the station in question but in relation to which no CHP LEC is issued (including for this purpose, and discretely identified, any renewable source electricity (see Part IV) or electricity produced when no exemption certificate is in force for the station).

5

That record must show –

• (a) when each relevant supply of electricity is treated as taking place and the recipient of each such supply;

• (b) the CHP LEC (if any) relating to that electricity and, if different from the recipient, the identity of any person to whom entitlement to the CHP LEC is transferred;

• (c) the date (or dates) on which each other event to which it relates occurs;

• (d) the date on which each entry to the record is made.

6

That record must be kept for 6 years starting from each reconciliation day to which it is relevant (see paragraphs 10 and 13(3)).

7

Subject to paragraph 6, that record must be made available on request and at any reasonable time to a person authorised by–

• (a) the Secretary of State, or

• (b) the relevant Authority.

8

• (1) This paragraph only applies whilst the relevant Authority has information on the basis of which it reasonably believes that the person mentioned in paragraph 2 is not fully complying with the CHP outputs record requirements in paragraphs 2 to 7.

• (2) The relevant Authority must refuse to certify or issue any CHP LEC in relation to electricity produced in the station (see regulations 51B(1) and 51B(8)).

• (3) The relevant Authority must also restrict the validity of any relevant and as yet unrestricted CHP LEC to indirect supplies, in which case the relevant Authority must as soon as practicable notify that restriction to the person to whom it was issued (see regulation 51B(8)).

• A CHP LEC is relevant for this purpose if it has not been reconciled in accordance with this Schedule (see paragraph 13(1)).

Reconciliation of outputs

9

For the purposes of the following paragraphs, regard a completed calendar year as one for which 31 December is passed and an incompleted calendar year as one for which 31 December is not passed.

10

• (1) The reconciliation day for a completed calendar year is the earlier of–

• (a) the first day of the month in the subsequent calendar year in which regulation 3(2) of the Climate Change Levy (Combined Heat and Power Stations) Exemption Certificate Regulations 2001 is met in relation to the station (current CHPQA certificate sent to Secretary of State by 30 June);

• (b) the day in the subsequent calendar year on which revocation of the current exemption certificate takes effect pursuant to regulation 4(2) of those Regulations (station ceases to operate, current CHPQA certificate not sent to Secretary of State by 30 June, or relevant written request to Secretary of State).

• The “reconciliation span” relating to this reconciliation day spans 1 January in the completed calendar year to the day before the reconciliation day, inclusive.

• (2) A reconciliation day for an incompleted calendar year is any day in that incompleted calendar year on which revocation of the current exemption certificate takes effect pursuant to regulation 4(2) of those Regulations.

• The “reconciliation span” relating to any such reconciliation day spans 1 January in that calendar year to the day before that reconciliation day, inclusive.

• (3) The relevant Authority shall act in accordance with paragraph 11 no later than the 90th day following a reconciliation day, subject as appropriate to regulations 51C and 51D (relevant Authority neither certifying electricity nor issuing CHP LEC, or relevant Authority dealing with incorrect certification).

• (4) A reconciliation day in paragraph (2) may arise irrespective of any overlap between the reconciliation span in that paragraph with the reconciliation span in paragraph (1).

11

• (1) The relevant Authority shall determine whether insufficient or excessive CHP LECs have been issued and remain unrestricted as respects each reconciliation span, having proper regard to the difference between–

• (a) the quantity of QPO electricity actually produced in the station during that reconciliation span, and

• (b) the quantity of QPO electricity represented by the CHP LECs issued as respects electricity produced in the station during that reconciliation span and remaining unrestricted.

• (2) If the relevant Authority determines that insufficient CHP LECs have been issued and remain unrestricted as respects a reconciliation span, it must–

• (a) to the extent of that insufficiency, and

• (b) as respects that reconciliation span,

issue additional CHP LECs (see regulation 51B(8)) as respects the QPO electricity outputs of the station.

• Any such CHP LEC must, within 60 days of issue, be allocated by the person referred to in paragraph 2 to relevant and appropriate supplies identified in the record as taking place in that reconciliation span.

• (3) If the relevant Authority determines that excessive CHP LECs have been issued and remain unrestricted as respects a reconciliation span, it must act in accordance with paragraphs (4) and (5), as appropriate (but this is subject to sub-paragraphs (9) and (10)).

• (4) If the reconciliation day arises because regulation 3(2) of the Climate Change Levy (Combined Heat and Power Stations) Exemption Certificate Regulations 2001 is met (see paragraph 10(1)(a)), the relevant Authority must treat the excess CHP LECs as being prospectively referable to figures made known to it by the operator for the purposes of regulation 51B(2) as respects production in the station after the relevant reconciliation day.

• (5) If the relevant reconciliation day arises because the exemption certificate is revoked (see paragraph 10(1)(b)), the relevant Authority must restrict the validity of any excess CHP LECs to indirect supplies, in which case it must as soon as practicable notify that restriction to the person to whom the CHP LEC in question was issued or to any person appearing to control the station (see regulation 51B(8)).

• The relevant Authority must ensure that those CHP LECs remaining unrestricted afterwards (and not yet reconciled, see paragraph 13(1)) collectively represent QPO electricity produced in the station during the reconciliation span.

• (6) For the purposes of this paragraph, the relevant Authority must regard calendar year 2003 as beginning on 1 April 2003.

• (7) For the purposes of regulation 51B(6) (QPO electricity referable to calendar year), the relevant Authority must not regard electricity referable to before 1 April 2003 as QPO electricity

• (8) 8 In the case of electricity and a station to which this paragraph applied before 22nd July 2005 but not after 21st July 2005 (see regulation 51A(2)), the relevant Authority must treat 22nd July 2005 as a reconciliation day for an incompleted calendar year running from 1st January to 21st July 2005 inclusive (the “reconciliation span”).

The determination in sub-paragraph (1) must be made on the basis that a partly exempt station’s annual limit for that incompleted calendar year is the former limit multiplied by the fraction with a numerator of 202 and a denominator of 365.

For these purposes, the “former limit” is the one in force on 1st January 2005 under regulation 5(2) of the Climate Change Levy (Combined Heat and Power Stations) Prescribed Conditions and Efficiency Percentages Regulations 2001.

• (9) Sub-paragraph (10) applies where a reconciliation span relating to a reconciliation day spans 1st January 2012 to the day before a reconciliation day that falls in the calendar year 2013.

• (10) Where this sub-paragraph applies—

• (a) sub-paragraphs (4) and (5) do not apply; and

• (b) the relevant Authority need not take any action in respect of the excessive CHP LECs that have been issued and remain unrestricted.

Monitoring and balancing obligation

12

• (1) The CHP outputs record must never show or indicate as respects a reconciliation span–

• (a) a deficit of unrestricted CHP LECs in relation to the total quantity of QPO electricity identified in the record pursuant to paragraph 3(2)(a) and 3(2)(b) (self-supplies and supplies to consumers);

• (b) a deficit of unrestricted plus restricted CHP LECs in relation to the total quantity of QPO electricity identified pursuant to paragraph 3(2)(a), 3(2)(b) and 3(2)(c) (self-supplies, supplies to consumers and supplies to others).

• (2) Each deficit representing 1 MWh shall be regarded as a separate breach of this paragraph for the purposes of regulation 60(1)(hb) (penalties).

• (3) Paragraph (1) has effect subject to paragraphs 3(4), 3(5), 11(2) and 11(5).

• (4) Paragraph (1) continues to apply after a CHP LEC is reconciled (see paragraph 13(1)).

Interpretation

13

• (1) A CHP LEC is “reconciled” for the purposes of this Schedule only if–

• (a) it is the subject of a reconciliation span in relation to which the relevant Authority has performed its functions under paragraph 10(3), and

• (b) it is allocated, if required, in accordance with paragraph 11(2).

• (2) A CHP LEC the validity of which is restricted under paragraph 8(3) or 11(5) may be regarded as a restricted CHP LEC for the purposes of regulations 51I to 51M.

• (3) The CHP outputs record is relevant to a reconciliation day to the extent that it records (or is required to record) events taking place during the reconciliation span relating to that reconciliation day (see paragraphs 6, 10(1) and 10(2)).

• (4) See also regulation 51A.

Compulsory updates, corrections and payment of CCL due, exemption from CCL registration

Tax credit for recipient and reconciliation for input fuel to combined heat and power stations

9A

Paragraphs 5 to 9 apply subject to the modifications in paragraph 9C, but those modifications are only relevant to the extent that the recipient’s relief percentage is determined on the basis of a quantity of taxable commodity referable to paragraph 15 of the Act (supplies to combined heat and power stations).

9B

• (1) For the purposes of the following sub-paragraphs, regard a completed calendar year as one for which 31st December is passed and an incompleted calendar year as one for which 31st December is not passed.

• (2) The reconciliation day for a completed calendar year is the earlier of—

• (a) the first day of the month in the subsequent calendar year in which regulation 3(2) of the Climate Change Levy (Combined Heat and Power Stations) Exemption Certificate Regulations 2001 is met in relation to the station in question (current CHPQA certificate sent to Secretary of State by 30th June);

• (b) the 60th day after any day in the subsequent calendar year on which the station’s exemption certificate is revoked pursuant to regulation 4(2) of those Regulations (station ceases to operate, current CHPQA certificate not sent to Secretary of State by 30th June, or relevant written request to Secretary of State).

The “reconciliation span” relating to this reconciliation day is the completed calendar year.

• (3) A reconciliation day for an incompleted calendar year is the 60th day after any day in that incompleted calendar year on which the station’s exemption certificate is revoked pursuant to regulation 4(2) of those Regulations.

The “reconciliation span” relating to any such reconciliation day spans 1st January in that calendar year to the day before that reconciliation day, inclusive.

9C

• (1) The recipient must review the correctness of the supplier certificate no later than a reconciliation day in paragraph 9B.

This review is only in relation to that part of the recipient’s relief percentage that is determined on the basis mentioned in paragraph 9A (taxable commodities supplied to combined heat and power stations).

• (2) That correctness must be reviewed in relation to the efficiency percentage determined for the relevant reconciliation span (for determination of efficiency percentage, see regulations 3(2) and 6(2) of the Climate Change Levy (Combined Heat and Power Stations) Regulations 2005).

In the case of a reconciliation span for an incompleted calendar year, treat the actual efficiency percentage as one determined for the 12 month period preceding the relevant reconciliation day and as if that period was an Annual Operation (for Annual Operation, see regulation 51B(6)), but as zero for any time the exemption certificate stands revoked.

• (3) The review must properly take into account—

• (a) each quantity of taxable commodity supplied on the basis of the supplier certificate or certificates in question and not previously the subject of a review under this paragraph, and

• (b) the actual efficiency percentage for the station in question at the time or times when that taxable commodity is supplied.

• (4) Sub-paragraph (5) or (6) applies if the review demonstrates that the supplier certificate was incorrect as respects the taxable commodity referable to paragraph 15 of the Act (supplies to combined heat and power stations).

• (5) If the CCL relief percentage applied was too low, the recipient may act in accordance with paragraphs 6 to 9 (recipient’s tax credit for supply incorrectly made on basis of its being a taxable supply) (but only in relation to the taxable commodity referable to paragraph 15 of the Act – supplies to combined heat and power stations).

After 21st July 2005, and irrespective of when the supplies in question were made or other relevant events occurred, paragraph 5(5) does not apply where this paragraph applies.

• (6) If the CCL relief percentage applied was too high, paragraphs 5(7) to 5(9F) apply accordingly (deemed taxable self supplies, exemption from registration, payment of CCL due, etc).

• (7) This paragraph only applies to supplies made after 31st December 2004, but not to those supplies in relation to which corresponding arrangements have been initiated or made before 22nd July 2005.

Corresponding arrangements are only—

• (a) claims by the recipient for tax credits or similar repayments, or

• (b) steps taken by the recipient to correct the position following a review demonstrating that a CCL relief percentage was too high (delivery of updated supplier certificate such that error corrected in one year, adjustment in CCL return, payment to Commissioners – see paragraph 5(6) as in force before 22nd July 2005).

Miscellaneous

16

A supplier certificate ceases to be valid for the purposes of regulation 34, 35 or 36 on the 5th anniversary of its implementation date (about which, see regulation 37(6)).

2A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Special rules for excluded, exempt ... ... and reduced-rate supplies

Special rules for excluded, exempt ... , recycling lower-rate supplies and reduced-rate supplies

40A

A quantity of a commodity is not to be the subject of a deemed supply under paragraph 24A of the Act (deemed taxable supplies of commodities to be used in producing electricity) so far as it is the subject of a taxable supply as provided for by regulation 40(2) in its application for the purposes of paragraph 14(1) of the Act.

Input fuels referable to the production of electricity in combined heat and power stations

51N

Schedule 3 has effect for the purpose of determining the extent to which a quantity of a carbon price support rate commodity is referable to the production of electricity in a combined heat and power station.

SCHEDULE 3 — FUELS REFERABLE TO THE PRODUCTION OF ELECTRICITY IN A COMBINED HEAT AND POWER STATION

Interpretation

1

In this Schedule—

• “Annual Operation” means a period commencing on 1st January and finishing on 31st December;

• ...

• “CHP Qualifying Heat Output” “CHP Qualifying Power Output” “CHP scheme” ... “CHP Total Fuel Input” and “CHP Total Power Output” have the meaning given in section 4 of the CHPQA;

Calculation of fuels referable to the production of electricity

2

• (1) The extent to which a quantity of a carbon price support rate commodity is referable to the production of electricity in a combined heat and power station is to be determined in accordance with sub-paragraphs (2) (3) and (4).

• (2) Calculate the total quantity of input fuels referable to the production of electricity in accordance with the following formula—

$$(TFI−QHOηh,ref)x(1−MOTPO)$Where—TFIis the CHP Total Fuel Input for the station specified on the current CHPQA certificate relating to the station at the time the quantity of the carbon price support rate commodity is brought onto, or arrives at, the CHPQA site.QHO is the CHP Qualifying Heat Output for the station specified on the current CHPQA certificate relating to the station at the time the quantity of the carbon price support rate commodity is brought onto, or arrives at, the CHPQA site.ηh,refis the reference boiler heat efficiency, taken here to be 81%.MO is Mechanical Output, which is the amount of energy in megawatt-hours (electrical) (MWhe) generated by the station in a given annual operation that is used to drive a mechanical load (such as a pump, fan or compressor) through direct coupling, without the use of electricity.TPO is the CHP Total Power Output for the station on the current CHPQA certificate relating to the station at the time the quantity of the carbon price support rate commodity is brought onto, or arrives at, the CHPQA site.$

• (2A) Sub-paragraphs (2B) to (2E) apply, instead of sub-paragraphs (3) and (4), in relation to carbon price support rate commodities brought onto, or arriving at, a CHPQA site on or after 1st April 2015.

• (2B) The extent to which a quantity of a carbon price support rate commodity is referable to the production of non-qualifying electricity in a combined heat and power station is to be determined in accordance with sub-paragraphs (2C) to (2E).

• (2C) Calculate the total quantity of input fuels referable to the production of non-qualifying electricity in accordance with the following formula—

$$Q×(1−ESTPO−MO)$Where—Q is the quantity of input fuels referable to the production of electricity calculated in accordance with sub-paragraph (2);ES (which must not exceed the QPO) is the amount of qualifying electricity in MWh generated by the station in the annual operation to which the current CHPQA certificate relating to the station applies at the time the quantity of carbon price support rate commodity is brought onto, or arrives at, the CHPQA site;QPO is the CHP Qualifying Power Output for the station specified on the current CHPQA certificate relating to the station at the time the quantity of carbon price support rate commodity is brought onto, or arrives at, the CHPQA site;TPO and MO have the meaning given in sub-paragraph (2).$

• (2D) Calculate the percentage of input fuels referable to the production of non-qualifying electricity in accordance with the following formula—

$$(RTFI)×100$Where—R is the quantity of input fuels referable to the production of non-qualifying electricity calculated in accordance with sub-paragraph (2C);TFI has the meaning given in sub-paragraph (2).$

• (2E) Apply the percentage calculated in accordance with sub-paragraph (2D) to the quantity of carbon price support rate commodities brought onto, or arriving at, the CHPQA site.

• (3) Calculate the percentage of input fuels referable to the production of electricity in accordance with the following formula—

$$QTFIx100$Where—Q is the quantity of input fuels referable to the production of electricity calculated in accordance with sub-paragraph (2).TFIis the CHP Total Fuel Input for the station specified on the current CHPQA certificate relating to the station at the time the quantity of the carbon price support rate commodity is brought onto, or arrives at, the CHPQA site.$

• (4) Apply the percentage calculated in accordance with sub-paragraph (3) to the quantity of carbon price support rate commodities brought onto, or arriving at, the CHPQA site.

Compulsory review of calculation

3

• (1) This paragraph applies where a person (“P”)—

• (a) has accounted for CCL on a deemed supply under paragraph 24B of the Act; and

• (b) the quantity of the carbon price support rate commodity that was the subject of the deemed supply has been calculated in accordance with paragraph 2 of this Schedule.

• (2) Where this paragraph applies P must review the correctness of that quantity—

• (a) in accordance with paragraphs 4 and 5; and

• (b) no later than a reconciliation day.

4

• (1) That correctness must be reviewed in relation to the CHP Total Fuel Input , the CHP Qualifying Heat Output, the CHP Qualifying Power Output, the qualifying electricity, the Mechanical Output and the CHP Total Power Output for the relevant reconciliation span.

• (2) In the case of a reconciliation span for an incompleted calendar year, treat the actual CHP Total Fuel Input , the CHP Qualifying Heat Output, the CHP Qualifying Power Output, the qualifying electricity, the Mechanical Output and the CHP Total Power Output as determined for the 12 month period preceding the relevant reconciliation day and as if that period was an Annual Operation.

• (3) For the purposes of paragraph 3(2) and this paragraph—

• (i) paragraph 9B of Schedule 1 to these Regulations has effect for the purposes of determining a reconciliation day and reconciliation span; and

• (ii) “incompleted calendar year” has the meaning given in that paragraph.

5

The review must properly take into account—

• (a) the quantities of carbon price support rate commodities that were the subject of deemed supplies; and

• (b) the quantities that ought to have been the subject of deemed supplies having regard to the actual CHP Total Fuel Input , CHP Qualifying Heat Output, CHP Qualifying Power Output, qualifying electricity, Mechanical Output and CHP Total Power Output for the station in question for the reconciliation span in which the commodities were supplied.

6

If the review determines that the quantities of carbon price support rate commodities that were the subject of deemed supplies was too little paragraphs 24C and 38A(2) of the Act apply accordingly.

7

If the review determines that the quantities of carbon price support rate commodities that were the subject of deemed supplies was too much P is entitled to a tax credit under Part II of these Regulations.