Comment Bulletin Environmental Taxes (June 2023) (2023)

1.Headlines

Total Provisional Climate Change Levy (CCL) and carbon price floor (CPF) Revenue for the latest full financial year 2022 to 2023 was £2,093 million, which is £163 million (8%) higher than the previous financial year.

Total provisional landfill tax (ALS T) Revenue for the latest full financial year 2022 to 2023 was £626 million, which is £41 million (6%) lower than the previous financial year.

Total provisional surcharge for additives (AGL) Revenue for the latest full financial year 2022 to 2023 was £378 million, which is £32 million (8%) lower than the previous financial year.

2.About this release

This bulletin was created in June 2021 and is updated annually in June. The content was previously published in three separate bulletins and was created after oneconsultation on the reduction and consolidation of HMRC statistics publications.

HMRCwelcomes users' involvement in improving the departments' national and official statistics. You cancontactstatistic producers on GOV.Britainor the team responsible for this bulletin directlyRevenuemonitoring@hmrc.gov.uk.

This publication provides statistics for:

• CCLInCPF
• ALS T
• AGL

The latest release has been updated with provisional receipt data through May 2023 and provisional returns forALS TlikeAGLfor until April 2023. Due to data delivery issues related toCCLprovisional declarations for this category are currently not included. We are working to rectify this and will confirm the date of the updated version of this edition through the officialHMRC Statistics announcement page.

The difficulties with taxpayers filing their returns during the coronavirus pandemic also means that these statistics should be treated with extra caution in the fiscal year ending in 2021.

The 'Bulletin Environmental Taxes' isCrown copyright. The information contained therein may be used, as long as the source is clearly stated by the user.

3.Historical trends in environmental tax revenues over the last decade

Figure 1: Total revenue from environmental taxes over the past ten financial years, in £ million

The receipts for the financial year ending in 2023 are provisional.

Figure 1 shows the following trends:

• CPF was introduced on April 1, 2013, which added a new rate for fossil fuels used to generate electricity; there was therefore a significant increase in the numberCCLInCPFreceipts from the financial year ending in 2013; since the fiscal year ending in 2015,CCLInCPFhave been the greatest environmental burden

• ALS TThe receipts show a downward trend from the financial year ending 2014 to the financial year ending 2022, with the receipts increasing compared to the previous year. However, in the financial year ending in 2023, revenues fell again compared to the previous year. During this entire period, the standard rate ofALS TThe costs charged have increased significantly, but the receipts continue to fall.

• AGLrevenues have been the smallest of the three environmental taxes over the past ten fiscal years; Revenues showed a gradual increase overall over this ten-year period, but decreased slightly in the fiscal year ending in 2023 compared to the previous year

Table 1: Environmental tax receipts in the financial year for the past 10 full financial years, £ million

4.Receipts and explanations of the climate change levy and the minimum price for carbon

CCLis levied on the industrial and commercial supply of taxable goods for lighting, heating and power by consumers in the following sectors:

• industry
• handel
• Agriculture
• public administration
• other services

CCLdoes not apply to taxable goods used by domestic consumers or charities for non-business use.

CCLis levied on taxable supplies. Taxable supplies are certain supplies of the following taxable goods:

• electricity
• natural gas as supplied by a gas company
• petroleum and hydrocarbon gas in liquid state
• coal and lignite
• coke and semi-coke of coal or lignite
• petroleumcokes

CPFis a tax on fossil fuels used in electricity generation. This was achieved through changes to the existingCCLregulation for gas, solid fuels and liquefied petroleum gas (LPG) used for electricity generation. These changes include the introduction of new onescarbon price support rates (CPS).vanCCL.

This publication provides official statistics forCCLInCPFreceipts and declarations per fuel type:

• electricity
• gas
• solid and other fuels, including liquefied petroleum gas (LPG)

It is not possible to provide accurate individual receipt statisticsCCLInCPFbecause taxpayers pay the receipts for both as one payment. An estimate of individual receipt statistics forCCLInCPFis provided on the basis of taxpayer filing information and should be treated with caution.

CCLInCPFtaxpayers primarily track accounting periods on a quarterly basis. The tax return must be filed by the end of the month following the accounting period. Paying taxes is usually also the result ofHMRCby the same time, but taxpayers who pay by direct debit will get a seven-day extension.

These accounting periods and payment patterns cause a delay of one to two months between the end of the accounting periods and when the receipts are receivedHMRC.

Figure 2: TotalCCLInCPFreceipts by financial year, in £ million

The receipts for the financial year ending in 2023 are provisional.

Figure 2 shows the following trends for the totalCCLInCPFreceipts:

• CCLInCPFRevenues are down in the financial year ending 2021, possibly due to the fallout from the government's response to the coronavirus (COVID-19) pandemic, as national lockdown policies have most likely reduced energy demand among the commodities affected by the pandemic.CCLInCPF. However, this applies to the financial year ending in 2023CCLInCPFRevenues have returned to above pre-pandemic levels for the financial year ending in 2020

• For the fiscal year ending in 2023CCLInCPFrevenues have reached their highest level at £2,092 million, with the previous peak in the financial year ending 2020 being £2,004 million

Figure 3: TotalCCLInCPFdeclarations broken down into electricity, gas and solid and other fuels per financial year

Due to data delivery issues related toCCLpreliminary statements for fiscal year ending 2023 are currently not included in Figure 3. We are working to rectify this and will confirm the date of the update of this edition through the officialHMRC Statistics announcement page.

Figure 3 shows the following trends for the totalCCLInCPFexplanations:

• CCLInCPFbetween the financial years ending in 2013 and 2017, declarations increased significantly, mainly due to the increasing gas declarations between these years; since the fiscal year ending in 2017,CCLInCPFthe statements have remained quite stable

• Electricity declarations have generally increased since the fiscal year ending 2015, with the highest level in the fiscal year ending 2020

• gas receipts increased significantly each year between the years ending 2013 and 2017; after that, revenues generally stabilized

• declarations for solid and other fuels have followed a consistent downward trend since the fiscal year ending in 2014, likely due to decreasing amounts of coal used for electricity production in theBritain

5.Landfill tax receipts and returns

ALS Tis a tax paid by landfill operators on the disposal of material in a landfill. The tax is passed on to businesses and local governments through the gate charge for dumping waste in a landfill.

The tax aims to provide an incentive to divert waste from landfills to other, less harmful methods of waste management, such as recycling and incineration.

The tax is levied by weight. There are two rates; standard rate and lower rate.

• A lower rate applies to non-hazardous and less polluting materials

• The standard rate applies to all other taxable materials, including all removals from an unauthorized location

As of April 1, 2023, the following rates apply:

• stock tarief: £3.25 per tonne
• standard rate: £102.10 per ton

Exceptions exist for dredging, mining and quarry waste, pet cemeteries, quarry filling and waste from visiting military forces.

Figure 4: TotalALS Treceipts per financial year

The receipts for the financial year ending in 2023 are provisional.

Figure 4 shows the following trendsALS Treceipts:

• ALS Trevenues have fallen substantially over the past ten financial years; in the financial year ending 2014 they amounted to £1,189 million; in the most recent financial year ending 2023 they had fallen to £626 million; the fiscal year ending in 2021 was affected by the coronavirus (COVID-19) pandemic; after an increase in receipts the following year, receipts for the fiscal year ending in 2023 continue the downward trend

• ALS Trates have risen year on year over the last decade; The standard rate has increased from £72.00 per tonne in April 2013 to £102.10 per tonne in April 2023, whileALS TRevenues fell during this period

• a shortage ofALS Trevenues should not necessarily be regarded as worrying, as the tax aims to provide an incentive to divert waste from landfills to other, less harmful methods of waste management, such as recycling and incineration. This turn of waste with a standard classification can be seen below in the declaration data

Figure 5: TotalALS Tdeclared tonnage broken down by taxable tonnage, of which the taxable tonnage is exempted and exempted tonnage per financial year

The tonnage figures for the financial year ending in 2023 are provisional.

Figure 5 shows the following trends forALS Ttonnage:

• total tonnage has shown a downward trend over the past ten years; the fiscal year ending in 2021 was affected by the coronavirus (COVID-19) pandemic; after an increase in receipts the following year, receipts for the fiscal year ending in 2023 again continue the downward trend

• Standard rate tonnage receipts have shown a downward trend over the past decade, with an increase in the fiscal year ending in 2022, following a year impacted by COVID, but with the fiscal year ending in 2023 declining from the previous one year

• Standard rate tonnage as a percentage of total tonnage decreased from 48% in the fiscal year ending 2014 to 29% in the fiscal year ending 2023.

• tonnage with lower rates has shown a global downward trend over the last decade, with the lowest level in this period in the fiscal year ending in 2023

• the lower tonnage as a percentage of total tonnage increased from 31% in the year ended 2019 to 43% in the year ended 2021 (with some fluctuations in this period), after which this share fell to 37% in the year ended 2023

• the exempted tonnage shows no clear trends during this period, with levels in the fiscal year ending in 2023 broadly comparable to those in the fiscal year ending in 2014, with some fluctuation during this period. However, the exempted tonnage as a percentage of the total tonnage shows an increasing trend in this period; increasing from 21% in the financial year ending in 2014 to 34% in the financial year ending in 2023

• ALS TThe declared tonnage for the financial year ending in 2023 is 22,354 thousand tons, which is 421 thousand tons (2%) lower than the previous financial year

6.Collects tax receipts and declarations

This publication provides official statistics onAGLreceipts and statements.

AGLincludes digging, dredging or commercially importing aggregate into theBritain.

The current rate is £2 per tonne (from 1 April 2024 this will increase to £2.03 per tonne)

Traders become liable for the levy when an aggregate:

• used for construction purposes
• mixed with anything other than water (excluding special circumstances)
• away from:
  • its original location
  • a connected site registered under the same name as the original site
  • a location where an exempt process was intended to be applied to it, but this process was not applied

TotalAGLThe declared quantity is calculated by adding together the declared taxable and exempt quantity (the exempted quantity is excluded from the calculation to avoid double counting as it is part of the taxable quantity). Since taxable tonnage makes up the largest portion of total declared tonnage, the pattern of total tonnage is dominated by patterns in taxable tonnage.

Figure 6: TotalAGLreceipts per financial year

The receipts for the financial year ending in 2023 are provisional.

Figure 6 shows the following trends forAGLreceipts:

• AGLreceipts have shown an overall upward trend over the past ten financial years, with some fluctuation, from £285 million in the financial year ending 2014 to £378 million (provisional) in the financial year ending 2023, with some fluctuation over this period

• the fiscal year ending in 2021 would have been impacted by the coronavirus (COVID-19) pandemic.

• The aggregate levy rate has remained constant at £2 per tonne over this period

Figure 7: TotalAGLdeclared tonnage broken down by taxable tonnage, of which the taxable tonnage is exempted and exempted tonnage per financial year

The tonnage declarations for the financial year ending in 2023 are provisional.

Figure 7 shows the following trends forAGLtonnage declarations:

• totalAGLthe tonnage shows an increasing trend from 206 million tons in the financial year ending in 2014 to 251 million tons in the financial year ending in 2020; totalAGLTonnage has since declined, with the provisional tonnage for the fiscal year ending in 2023 at 231 million tonnes

• the ratio of taxable tonnage to total tonnage has generally remained stable over this period, fluctuating between 92% and 93% between the fiscal year ending 2015 and the fiscal year ending 2022. However, in the fiscal year ending 2023, this share decreased up to 89%; indicating a shift from taxable tonnage to exempt tonnage

• TotalAGLThe declared tonnage for the financial year ending in 2023 is 230,603 thousand tons, which is 13,991 thousand tons (6%) lower than the previous financial year