Climate Change Levy rates 2026/27 and when CCL shouldn't be on your bill
The Climate Change Levy (CCL) is a tax on energy supplied to businesses. Your supplier adds it to the bill per kWh. It changes every 1 April, and some business supplies shouldn't carry it at all. Both are common sources of billing errors.
Main rates
| From | Electricity | Gas |
|---|---|---|
| 1 April 2025 | £0.00775 per kWh | £0.00775 per kWh |
| 1 April 2026 | £0.00801 per kWh | £0.00801 per kWh |
| 1 April 2027 | £0.00827 per kWh | £0.00827 per kWh |
On a bill, CCL is often shown in pence: 0.801p per kWh for electricity in 2026/27. For a business using 3,100 kWh in a month, that is about £24.83 of CCL before VAT. VAT is then charged on top of the CCL.
The climate change agreement discount
Energy-intensive businesses with a climate change agreement (CCA) pay a reduced rate. From 1 April 2026 to 31 March 2027 the discount is 92% for electricity and 89% for gas (source: Climate Change Levy rates (GOV.UK)), so you pay only a small fraction of the main rate. If you hold a CCA, check the reduced rate is actually applied: suppliers need the relief certificate on file.
Bills that span 1 April
The rate depends on when the energy was supplied. A bill from 17 March to 16 April should charge the old rate for the March days and the new rate for the April days. A bill that applies the new rate to the whole period overcharges slightly; one that applies the old rate throughout undercharges, which may be corrected on a later bill.
When CCL shouldn't be on the bill
HMRC's Excise Notice CCL1/3: Climate Change Levy reliefs and special treatments for taxable commodities sets out supplies that are excluded from the main rates of CCL:
- Domestic use, for example flats and other residential accommodation.
- Charity non-business use.
- De minimis supplies, small quantities treated as domestic use even for a business. The notice puts the limit for metered electricity at 1,000 kWh a month and for gas at 4,397 kWh a month.
The de minimis rules for CCL mirror the VAT rules. HMRC's internal manual HMRC internal manual VFUP5000: Climate change levy (CCL) explains that supplies that are reduced-rated for VAT are, in general, not liable to CCL. So a small site whose electricity qualifies for reduced-rate (or, in Great Britain from 1 October 2026, zero-rate) VAT through de minimis should normally have no CCL on the bill.
A common error: a small shop or office within the de minimis limit is charged both 20% VAT and CCL. Both are likely wrong. See the VAT guide for the de minimis test.
Gas: CCL is charged on kWh, not cubic metres
Gas meters measure volume. Your supplier converts the volume to kWh using the calorific value and a standard correction factor, and charges CCL on the kWh figure. Check that the kWh used for the CCL line matches the kWh used for the energy charge: they should be the same number.
How to check CCL on your bill
- Work out the average kWh a day for the billing period. If it is within the de minimis limit, there should normally be no CCL.
- Otherwise, multiply the kWh by the rate for the dates. Split the period at 1 April if it spans it.
- If you hold a CCA, apply the discount.
- Compare with the CCL line on the bill. A difference of more than a few pence is worth raising.
CheckEnergyBill applies the dated rates, splits bills across 1 April and checks the exclusions, with the working shown. Check a bill free.
Sources: Climate Change Levy rates (GOV.UK); Excise Notice CCL1/3: Climate Change Levy reliefs and special treatments for taxable commodities; HMRC internal manual VFUP5000: Climate change levy (CCL).