Finance Bill - continued        House of Lords
SCHEDULE 6, CLIMATE CHANGE LEVY - continued

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  PART III
  TIME OF SUPPLY
 
Introduction
     25. This Part of this Schedule applies to determine when a supply of a taxable commodity is treated as taking place.
 
 
Electricity or gas: supply when climate change levy accounting document issued
     26. - (1) This paragraph applies-
 
 
    (a) to supplies of electricity, and
 
    (b) to supplies of gas where the gas is supplied in a gaseous state and is of a kind supplied by a gas utility.
      (2) Where this paragraph applies, a supply is treated as taking place each time a climate change levy accounting document in respect of a supply is issued by the person making the supply.
 
      (3) A supply that is treated as taking place under this paragraph is a supply of the electricity or gas covered by the accounting document.
 
      (4) Nothing in this paragraph applies to any electricity or gas that is covered by a special utility scheme (see paragraph 29).
 
 
Electricity or gas: duty to issue climate change levy accounting document
     27. - (1) This paragraph applies where on any day-
 
 
    (a) electricity, or gas that is in a gaseous state and is of a kind supplied by a gas utility, is actually supplied to a person ("the consumer"),
 
    (b) the supply by which the electricity or gas is supplied is a taxable supply, and
 
    (c) the person liable to account for the levy on that supply is the person making the supply ("the supplier").
      (2) A climate change levy accounting document covering the electricity or gas actually supplied on that day must be issued by the supplier no later than-
 
 
    (a) the end of the period of 15 weeks beginning with that day, if on that day the consumer is a small-scale user of the commodity supplied;
 
    (b) the end of the period of 6 weeks beginning with that day, if on that day the consumer is not a small-scale user of the commodity supplied.
      (3) A climate change levy accounting document issued under this paragraph that covers the electricity, or the gas of any kind, actually supplied on any day must also cover any electricity or (as the case may be) any gas of that kind that-
 
 
    (a) has been actually supplied by the supplier to the consumer on any earlier day, and
 
    (b) has not been covered by a previous climate change levy accounting document.
      (4) For the purposes of this paragraph-
 
 
    (a) an accounting document shall be taken to cover the electricity or gas actually supplied on a day if it covers the electricity or gas actually supplied during a period that includes that day; and
 
    (b) an accounting document shall be taken to cover the electricity or gas actually supplied on a day or during a period if it is an accounting document for a quantity of electricity or gas that is a reasonable estimate of the quantity actually supplied.
      (5) A climate change levy accounting document issued under this paragraph must contain a statement of-
 
 
    (a) the quantity of electricity or gas that it covers,
 
    (b) the period during which, or during which it is estimated that, that quantity was actually supplied,
 
    (c) the supplier's name and address,
 
    (d) the customer's name and address, and
 
    (e) the reference number used by the supplier for the customer.
      (6) For the purposes of this paragraph a person is, on any day, a small-scale user of a commodity if the rate at which he is taken to be supplied with that commodity on that day does not exceed the prescribed rate.
 
      (7) The Commissioners may make provision by regulations as to the rate at which a person is, for the purposes of sub-paragraph (6), taken to be supplied with a commodity on any day.
 
      (8) Regulations under sub-paragraph (7) may, in particular, include provision for-
 
 
    (a) rates to be determined or estimated in accordance with the regulations;
 
    (b) rates to be so determined or estimated by reference to the quantity of a commodity actually supplied, or estimated to have been actually supplied, during a period ending with, or at any time before or after, the day in question;
 
    (c) cases where a person is supplied with a commodity of any kind by two or more suppliers.
      (9) Nothing in this paragraph applies to any electricity or gas-
 
 
    (a) that is covered by a special utility scheme (see paragraph 29), or
 
    (b) that is actually supplied before 1st April 2001.
      (10) This paragraph applies subject to paragraph 36(5).
 
 
Electricity or gas: actual supply not followed by climate change levy accounting document
     28. - (1) This paragraph applies where on any day-
 
 
    (a) electricity, or gas that is in a gaseous state and is of a kind supplied by a gas utility, is actually supplied to a person ("the consumer"),
 
    (b) the supply by which the electricity or gas is supplied is a taxable supply,
 
    (c) the person liable to account for the levy on that supply is the person making the supply ("the supplier"), and
 
    (d) the supplier does not within the period applicable under sub-paragraph (2) of paragraph 27 issue a climate change levy accounting document under that paragraph covering the electricity or gas.
      (2) Where this paragraph applies, a supply is treated as taking place at the end of that period.
 
      (3) A supply that is treated as taking place under this paragraph is a supply of all the electricity or (as the case may be) gas of the same kind that-
 
 
    (a) has been actually supplied by the supplier to the consumer before the end of that period, and
 
    (b) has not been covered by a climate change levy accounting document.
      (4) Sub-paragraph (4) of paragraph 27 (interpretation of "covered by an accounting document") applies for the purposes of this paragraph as for those of that paragraph.
 
      (5) Nothing in this paragraph applies to any electricity or gas-
 
 
    (a) that is covered by a special utility scheme (see paragraph 29),
 
    (b) that is actually supplied before 1st April 2001, or
 
    (c) that is treated under paragraph 36(3) as supplied on that day.
 
Electricity or gas: special utility schemes
     29. - (1) For the purposes of this Schedule a "special utility scheme" is a scheme for determining when-
 
 
    (a) a supply of electricity, or
 
    (b) a supply of gas that is in a gaseous state and is of a kind supplied by a gas utility,
       is treated as taking place in cases where the electricity or gas is covered by the scheme.
 
      (2) If in the opinion of the Commissioners it is reasonable to do so, they may in accordance with the provisions of this paragraph prepare a special utility scheme for a utility or for two or more utilities.
 
  In this paragraph "utility" includes a person who makes supplies on which levy is chargeable by virtue of paragraph 5(2) (partly exempt combined heat and power stations).
 
      (3) A special utility scheme shall specify the period for which it is to have effect.
 
      (4) No special utility scheme shall be of any effect in relation to any electricity or gas supplied by a utility unless the utility elects in writing to be bound by it for the specified period.
 
      (5) If a utility makes such an election-
 
 
    (a) the scheme shall have effect for the specified period in relation to such electricity or gas supplied by the utility as is covered by the scheme, and
 
    (b) during the specified period the scheme applies to determine when a supply of a taxable commodity is treated as taking place if the commodity is electricity or gas covered by the scheme.
      (6) A special utility scheme may-
 
 
    (a) cover all or any of the electricity or gas supplied by a utility for which the scheme is prepared;
 
    (b) provide for paragraph 36 or 37 not to apply, or to apply with modifications, to electricity or gas covered by the scheme.
      (7) The Commissioners may by regulations make further provision with respect to special utility schemes, including (in particular) provision amending this paragraph.
 
 
Other commodities: general rules for supply by UK residents
     30. - (1) This paragraph applies to supplies that are not of either of the descriptions mentioned in paragraphs (a) and (b) of paragraph 26(1) (electricity and gas in a gaseous state).
 
      (2) The general rules as to when such supplies are taken to be made are, in cases where the supply is made by a person resident in the United Kingdom, as follows-
 
 
    (a) if the commodity is to be removed, the supply takes place at the time of the removal;
 
    (b) if the commodity is not to be removed, the supply takes place when the commodity is made available to the person to whom it is supplied;
 
    (c) if the commodity (being sent or taken on approval or sale or return or similar terms) is removed before it is known whether a supply will take place, the supply takes place when it becomes certain that the supply has taken place or, if sooner, 12 months after the removal.
      (3) These general rules are subject to-
 
 
    paragraph 31 (earlier invoice),
 
    paragraph 32 (later invoice),
 
    paragraph 34 (deemed supplies), and
 
    paragraph 36 (directions by Commissioners).
 
Other commodities: earlier invoice
     31. - (1) If before the time applicable under paragraph 30(2) the person making the supply-
 
 
    (a) issues an invoice in respect of the supply, or
 
    (b) receives a payment in respect of it,
       the supply is treated, to the extent that it is covered by the invoice or payment, as taking place when the invoice is issued or the payment is received.
 
      (2) Sub-paragraph (1) does not apply where the commodity (being sent or taken on approval or sale or return or similar terms) is removed before it is known whether a supply will take place.
 
      (3) Sub-paragraph (1) applies subject to any direction under paragraph 35(3).
 
 
Other commodities: later invoice
     32. - (1) If within 14 days after the time applicable under paragraph 30(2) the person making the supply issues an invoice in respect of it, the supply is treated as taking place at the time the invoice is issued.
 
      (2) This does not apply-
 
 
    (a) to the extent that the supply is treated as taking place at the time mentioned in paragraph 31(1) (earlier invoice), or
 
    (b) if the person liable to account for any levy charged on the supply has notified the Commissioners in writing that he elects not to avail himself of sub-paragraph (1).
      (3) The Commissioners may, at the request of a person liable to account for any levy charged on any supplies, direct that sub-paragraph (1) shall apply-
 
 
    (a) in relation to those supplies, or
 
    (b) in relation to such of those supplies as may be specified in the direction,
       with the substitution for the period of 14 days of such longer period as may be specified in the direction.
 
      (4) Sub-paragraphs (1) to (3) apply subject to any direction under paragraph 35.
 
 
Other commodities: supply by non-UK residents
     33. - (1) This paragraph applies to supplies that-
 
 
    (a) are not of either of the descriptions mentioned in paragraphs (a) and (b) of paragraph 26(1) (electricity and gas in a gaseous state), and
 
    (b) are made by a person who is not resident in the United Kingdom.
      (2) The supply is treated as taking place-
 
 
    (a) when the commodity is delivered to the person to whom it is supplied, or
 
    (b) if earlier, when it is made available in the United Kingdom to that person.
      (3) Sub-paragraph (2) applies subject to-
 
 
    (a) sub-paragraph (4),
 
    (b) paragraph 34 (deemed supplies), and
 
    (c) any direction under paragraph 35.
      (4) If within 14 days after the time applicable under sub-paragraph (2) the person to whom the supply is made elects in writing for the supply to be treated as taking place at the time the election is made, the supply is treated as taking place at the time the election is made.
 
 
Other commodities: deemed supplies
     34. - (1) This paragraph applies to supplies that-
 
 
    (a) are not of either of the descriptions mentioned in paragraphs (a) and (b) of paragraph 26(1) (electricity and gas in a gaseous state), and
 
    (b) are deemed to be made under paragraph 23 or 24.
      (2) A supply that is deemed to be made under paragraph 23 is treated as taking place when the commodity is burned (or, in the case of electricity, consumed).
 
      (3) A supply that is deemed to be made under paragraph 24 is treated as taking place upon the occurrence of the change in circumstances or intentions.
 
 
Other commodities: directions by Commissioners
     35. - (1) This paragraph applies to supplies that are not of either of the descriptions mentioned in paragraphs (a) and (b) of paragraph 26(1) (electricity and gas in a gaseous state).
 
      (2) The Commissioners may, at the request of the person liable to account for any levy charged on any supplies to which this paragraph applies, make a direction under sub-paragraph (3) or (4) altering the time at which those supplies (or such of those supplies as may be specified in the direction) are to be treated as taking place.
 
      (3) The Commissioners may direct that the supplies shall be treated as taking place-
 
 
    (a) at times or on dates determined by or by reference to the occurrence of some event described in the direction, or
 
    (b) at times or on dates determined by or by reference to the time when some event so described would in the ordinary course of events occur,
       provided the resulting times or dates are in every case earlier than would otherwise apply.
 
      (4) The Commissioners may direct that the supplies shall be treated as taking place-
 
 
    (a) at the beginning of the relevant working period (as defined in the case of the person making the request in and for the purposes of the direction), or
 
    (b) at the end of the relevant working period (as so defined).
      (5) A direction under sub-paragraph (4) shall not apply to the extent that the time when the supplies in question are made is determined by paragraph 31(1).
 
 
Supplies invoiced or paid for before 1st April 2001
     36. - (1) This paragraph applies where-
 
 
    (a) the taxable commodities covered by an invoice issued, or payment received, before 1st April 2001 are to any extent commodities that have not been burned (or, in the case of electricity, consumed) before the invoice is issued or payment is received, and
 
    (b) the advance invoicing or payment is not acceptable normal practice.
  It does not matter whether the invoice mentioned in paragraph (a) is, or is not, a climate change levy accounting document.
 
      (2) A fair apportionment shall be made to determine the quantity of the taxable commodities covered by the invoice or payment that will not be, or was not, burned (or consumed) before 1st April 2001.
 
      (3) Where this paragraph applies, a supply is treated as taking place on 1st April 2001.
 
  That supply is a supply of the quantity of the taxable commodities that is mentioned in, and determined under, sub-paragraph (2).
 
      (4) For the purposes of this paragraph advance invoicing or payment is "acceptable normal practice" if-
 
 
    (a) the supply is of a kind in the case of which it is normal practice for invoices to be issued, or payments made, in respect of taxable commodities not already burned (or consumed),
 
    (b) that practice does not involve issuing invoices, or making payments, more than 15 weeks in advance of the burning (or consumption) of any of the taxable commodities in respect of which the invoice is issued or payment is made, and
 
    (c) the advance invoicing or payment is in accordance with the practice.
      (5) Nothing in paragraph 27 requires a climate change levy accounting document to be issued to cover any commodities that are supplied by a supply that, under sub-paragraph (3), is treated as made on 1st April 2001.
 
      (6) This paragraph applies to invoices issued, and payments received, before the passing of this Act (as well as to those issued or received after its passing).
 
 
Supplies of electricity or gas spanning change of rate etc.
     37. - (1) This paragraph applies in the case of a supply of electricity, or of gas that is in a gaseous state and is of a kind supplied by a gas utility, affected by-
 
 
    (a) a change in the descriptions of supplies that are taxable supplies,
 
    (b) a change in any rate of levy in force,
 
    (c) a change consisting in the rate of levy applicable to the supply ceasing to be, or becoming, the rate that is applicable to half-rate supplies or reduced-rate supplies, or
 
    (d) the change consisting in the transition from 31st March 2001 to 1st April 2001.
      (2) For the purposes of this paragraph a supply is affected by a change if the electricity or gas of which it is a supply ("the supplied commodity") is actually supplied partly before the change and partly after.
 
  However, this paragraph does not apply in the case of a supply that, under paragraph 36(3), is treated as made on 1st April 2001.
 
      (3) If the person liable to account for any levy on the supply so elects-
 
 
    (a) the rate at which levy is chargeable on any part of the supply, or
 
    (b) any question whether, or to what extent, the supply is a taxable supply,
       shall be determined in accordance with sub-paragraph (5) or (6).
 
      (4) An election for determination in accordance with sub-paragraph (6) may be made only where-
 
 
    (a) there is such a change as is mentioned in sub-paragraph (1)(c), and
 
    (b) all the supplied commodity is actually supplied before the supply is treated as taking place.
      (5) Where the election is for determination in accordance with this sub-paragraph, the rules are-
 
    "A. Treat the fraction of the supplied commodity actually supplied before the change ("the pre-change fraction") as supplied by a supply made before the change and treat the fraction of the supplied commodity actually supplied after the change ("the post-change fraction") as supplied by a supply made after the change.
 
     B. Where the pre-change and post-change fractions are not known (because, for example, there are no relevant meter readings available)-
 
 
    "the pre-change fraction" is calculated by dividing-
 
      (a) the number of days in the period over which the supply is actually made that fall before the change, by
 
      (b) the number of days in that period; and
 
    "the post-change fraction" is the difference between 1 and the pre-change fraction.
     C. If use of the fractions given by rule B would produce an inequitable result, the pre-change and post-change fractions may be derived from a reasonable estimate of the fractions of the supplied commodity actually supplied before and after the change.
 
      (6) Where the election is for determination in accordance with this sub-paragraph, treat the change as taking place immediately after the time at which the last of the supplied commodity was actually supplied.
 
 
Other supplies spanning change of rate etc.
     38. - (1) This paragraph applies where there is-
 
 
    (a) a change in the descriptions of supplies that are taxable supplies,
 
    (b) a change in the rate of levy in force,
 
    (c) a change consisting in the rate of levy applicable to any supply ceasing to be, or becoming, the rate that is applicable to half-rate supplies or reduced-rate supplies, or
 
    (d) the change consisting in the transition from 31st March 2001 to 1st April 2001.
      (2) Where-
 
 
    (a) a supply affected by the change would apart from special provisions be treated under paragraph 30(2) or 33(2) as made wholly or partly at a time when it would not have been affected by the change, or
 
    (b) a supply not so affected would apart from special provisions be treated under paragraph 30(2) or 33(2) as made wholly or partly at a time when it would have been so affected,
       the rate at which levy is chargeable on the supply, or any question whether it is a taxable supply, shall, if the person liable to account for any levy on the supply so elects, be determined without regard to the special provisions.
 
      (3) In this paragraph "special provisions" means the provisions of paragraphs 31, 32, 33(4) and 35.
 
 
Regulations as to time of supply
     39. - (1) The Commissioners may make provision by regulations as to the time at which a supply is to be treated as taking place-
 
 
    (a) in cases where the supply is for a consideration and the whole or part of the consideration-
 
      (i) is determined or payable periodically, or from time to time, or at the end of any period, or
 
      (ii) is determined at the time when the commodity is appropriated for any purpose;
 
    (b) in the case of a supply otherwise than for consideration;
 
    (c) in the case of any supply that is deemed to be made under paragraph 23 or 24.
      (2) In any such case as is mentioned in sub-paragraph (1) the regulations may provide that a taxable commodity shall be treated as separately and successively supplied at prescribed times or intervals.
 
      (3) Paragraphs 26 to 36 (main rules as to time of supply) have effect subject to any regulations under this paragraph.
 
      (4) The power to make regulations under this paragraph includes power to provide for specified provisions of the regulations to be treated as special provisions for the purposes of paragraph 38 (supplies spanning change of rate etc.).
 
  PART IV
  PAYMENT AND RATE OF LEVY
 
Persons liable to account for levy
     40. - (1) The person liable to account for the levy charged on a taxable supply is, except in a case where sub-paragraph (2) applies, the person making the supply.
 
      (2) In the case of a taxable supply made by a person who-
 
 
    (a) is not resident in the United Kingdom, and
 
    (b) is not a utility,
       the person liable to account for the levy charged on the supply is the person to whom the supply is made.
 
 
Returns and payment of levy
     41. - (1) The Commissioners may by regulations make provision-
 
 
    (a) for persons liable to account for levy to do so by reference to such periods ("accounting periods") as may be determined by or under the regulations;
 
    (b) for persons who are or are required to be registered for the purposes of the levy to be subject to such obligations to make returns for those purposes for such periods, at such times and in such form as may be so determined; and
 
    (c) for persons who are required to account for levy for any period to become liable to pay the amounts due from them at such times and in such manner as may be so determined.
      (2) Without prejudice to the generality of the powers conferred by sub-paragraph (1), regulations under this paragraph may contain provision-
 
 
    (a) for levy falling in accordance with the regulations to be accounted for by reference to one accounting period to be treated in prescribed circumstances, and for prescribed purposes, as levy due for a different period;
 
    (b) for the correction of errors made when accounting for levy by reference to any period;
 
    (c) for the entries to be made in any accounts in connection with the correction of any such errors and for the financial adjustments to be made in that connection;
 
    (d) for a person, for purposes connected with the making of any such entry or financial adjustment, to be required to provide to any prescribed person, or to retain, a document in the prescribed form containing prescribed particulars of the matters to which the entry or adjustment relates;
 
    (e) for enabling the Commissioners, in such cases as they may think fit, to dispense with or relax a requirement imposed by regulations made by virtue of paragraph (d);
 
    (f) for the amount of levy which, in accordance with the regulations, is treated as due for a later period than that by reference to which it should have been accounted for to be treated as increased by an amount representing interest at the rate applicable under section 197 of the Finance Act 1996 for such period as may be determined in accordance with the regulations.
      (3) Subject to the following provisions of this paragraph, if any person ("the taxpayer") fails-
 
 
    (a) to comply with so much of any regulations under this paragraph as requires him, at or before a particular time, to make a return for any accounting period, or
 
    (b) to comply with so much of any regulations under this paragraph as requires him, at or before a particular time, to pay an amount of levy due from him,
       he shall be liable to a penalty of £250.
 
      (4) Liability to a penalty under sub-paragraph (3) shall not arise if the taxpayer satisfies the Commissioners or, on appeal, an appeal tribunal-
 
 
    (a) that there is a reasonable excuse for the failure to make the return or to pay the levy in accordance with the regulations; and
 
    (b) that there is not an occasion after the last day on which the return or payment was required by the regulations to be made when there was a failure without a reasonable excuse to make it.
      (5) Where, by reason of any failure falling within paragraph (a) or (b) of sub-paragraph (3)-
 
 
    (a) a person is convicted of an offence (whether under this Schedule or otherwise), or
 
    (b) a person is assessed to a penalty under paragraph 98 (penalty for evasion),
       that person shall not, by reason of that failure, be liable also to a penalty under that sub-paragraph (3).
 
 
Amount payable by way of levy
     42. - (1) The amount payable by way of levy on a taxable supply is-
 
 
    (a) if the supply is neither a half-rate supply nor a reduced-rate supply, the amount ascertained from the Table in accordance with sub-paragraph (2);
 
    (b) if the supply is a half-rate supply, 50 per cent. of the amount that would be payable if the supply were neither a half-rate supply nor a reduced-rate supply;
 
    (c) if the supply is a reduced-rate supply, 20 per cent. of the amount that would be payable if the supply were neither a half-rate supply nor a reduced-rate supply.
 
 
TABLE
 
Taxable commodity supplied
 
Rate at which levy payable if supply is neither a half-rate supply nor a reduced-rate supply
 
Electricity......
 
£0.0043 per kilowatt hour
 
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility......
 
£0.0015 per kilowatt hour
 
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state......
 
£0.0096 per kilogram
 
Any other taxable commodity......
 
£0.0117 per kilogram
      (2) The levy payable on a fraction of a quantity of a commodity is that fraction of the levy payable on that quantity of the commodity.
 
 
Half-rate for supplies to horticultural producers
     43. - (1) For the purposes of this Schedule a half-rate supply is a taxable supply in respect of which the following conditions are satisfied-
 
 
    (a) the first condition is that the person to whom the supply is made is a horticultural producer;
 
    (b) the second condition is that the horticultural producer intends to use the taxable commodity supplied-
 
      (i) in the heating, for the growth of horticultural produce primarily with a view to the production of horticultural produce for sale, of any building or structure, or of the earth or other growing medium in it,
 
      (ii) in the lighting, for the growth of horticultural produce primarily with a view to the production of horticultural produce for sale, of any building or structure, or
 
      (iii) in the sterilisation of the earth or other growing medium to be used for the growth of horticultural produce as mentioned in sub-paragraph (i) in any building or structure.
      (2) In this paragraph "horticultural producer" means a person growing horticultural produce primarily for sale.
 
      (3) In this paragraph "horticultural produce" means-
 
 
    (a) fruit;
 
    (b) vegetables of a kind grown for human consumption, including fungi, but not including maincrop potatoes or peas grown for seed, for harvesting dry or for vining;
 
    (c) flowers, pot plants and decorative foliage;
 
    (d) herbs;
 
    (e) seeds other than pea seeds, and bulbs and other material, being seeds, bulbs or material for sowing or planting for the production of-
 
      (i) fruit,
 
      (ii) vegetables falling within paragraph (b),
 
      (iii) flowers, plants or foliage falling within paragraph (c), or
 
      (iv) herbs,
 
    or for reproduction of the seeds, bulbs or other material planted; or
 
    (f) trees and shrubs, other than trees grown for the purpose of afforestation;
       but does not include hops.
 
      (4) The Commissioners may by regulations make provision for facilitating the enjoyment of the reduced rate of levy payable on half-rate supplies.
 
      (5) Regulations under sub-paragraph (4) may, in particular, include provision-
 
 
    (a) for determining the extent to which a taxable supply is, or is to be treated as being, a half-rate supply;
 
    (b) for authorising a person making taxable supplies to another person to treat the supplies to that other person as being half-rate supplies only to an extent certified by the Commissioners;
 
    (c) for a person making half-rate supplies ("the supplier") to account for levy on those supplies as if the supplies were neither half-rate supplies nor reduced-rate supplies.
      (6) Provision such as is mentioned in sub-paragraph (5)(c) may be made only where tax credit regulations provide for a horticultural producer to be entitled to a tax credit in respect of 50 per cent. of the levy accounted for by the supplier on any half-rate supplies-
 
 
    (a) that are made by the supplier to the horticultural producer, and
 
    (b) on which the supplier has accounted for levy on the basis mentioned in sub-paragraph (5)(c).
 
Reduced-rate for supplies covered by climate change agreement
     44. - (1) Where the Secretary of State gives a certificate to the Commissioners stating that, for a period specified in the certificate, a facility is to be taken as being covered by a climate change agreement, the Commissioners shall publish a notice in respect of the facility.
 
      (2) Such a notice shall-
 
 
    (a) state the day on which it is published,
 
    (b) identify the facility or facilities in respect of which it is published,
 
    (c) for each facility-
 
      (i) set out the first and last days of the period specified for the facility in the Secretary of State's certificate, and
 
      (ii) indicate the effect of sub-paragraph (3),
 
    and
 
    (d) indicate that the notice may be varied by later notices.
      (3) For the purposes of this Schedule, a reduced-rate supply is a taxable supply in respect of which the following conditions are satisfied-
 
 
    (a) the first condition is that the taxable commodity supplied by the supply is supplied to a facility identified in a notice published under sub-paragraph (1);
 
    (b) the second condition is that the supply is made at a time falling in the period that begins with the later of-
 
      (i) the first day set out for the facility under sub-paragraph (2)(c), and
 
      (ii) the day on which the notice is published,
 
    and ends with the last day set out for the facility under sub-paragraph (2)(c).
      (4) Sub-paragraph (3) has effect subject to paragraph 45.
 
      (5) The Commissioners may, for the purposes of sub-paragraph (3), by regulations make provision for determining whether any taxable commodity is supplied to a facility.
 
      (6) The provision that may be made by regulations under sub-paragraph (5) includes, in particular, provision for a taxable commodity of any description specified in the regulations to be taken as supplied to a facility only if the commodity is delivered to the facility.
 
 
Reduced-rate supplies: variation of notices under paragraph 44
     45. - (1) This paragraph applies where the Secretary of State, after having given in respect of a facility such a certificate as is mentioned in paragraph 44(1) ("the original certificate"), gives a certificate (a "variation certificate") to the Commissioners stating-
 
 
    (a) that, throughout the period ("the original period") specified for the facility in the original certificate, the facility is to be taken as not being covered by a climate change agreement; or
 
    (b) that, for so much of the original period as falls on or after a day specified in the variation certificate (being a day falling within the original period), the facility is to be taken as no longer being covered by a climate change agreement.
      (2) Where the Commissioners receive a variation certificate in respect of a facility before they have published a notice under paragraph 44(1) in response to the original certificate so far as relating to the facility, their obligation to publish a notice under paragraph 44(1) in respect of the facility shall have effect as an obligation to publish such a notice in response to the original certificate as varied by the variation certificate.
 
      (3) Where the Commissioners receive a variation certificate but sub-paragraph (2) does not apply, they shall publish a notice (a "variation notice") that-
 
 
    (a) states the day on which it is published,
 
    (b) identifies the facility or facilities in respect of which it is published,
 
    (c) sets out, for each facility in respect of which the statement in the variation certificate is of the type described in sub-paragraph (1)(b), the date specified for the facility in the variation certificate, and
 
    (d) for each facility, indicates the effect of sub-paragraphs (4) to (7) as they apply in the case of the facility.
      (4) Sub-paragraphs (5) to (7) set out the effect of a variation notice being published in respect of a facility.
 
      (5) If-
 
 
    (a) the statement in the variation certificate in respect of the facility is of the type described in sub-paragraph (1)(a), and
 
    (b) the day on which the variation notice is published falls before the beginning of the original period,
       the notice ("the original notice") published under paragraph 44(1) in response to the original certificate has effect as if the facility had never been identified in it.
 
      (6) If-
 
 
    (a) the statement in the variation certificate in respect of the facility is of the type described in sub-paragraph (1)(a), and
 
    (b) the day on which the variation notice is published falls during the original period,
       the original notice has effect as if the last day set out for the facility under paragraph 44(2)(c) were the day on which the variation notice is published.
 
      (7) If the statement in the variation certificate in respect of the facility is of the type described in sub-paragraph (1)(b), the original notice has effect as if the last day set out for the facility under paragraph 44(2)(c) were the later of-
 
 
    (a) the day on which the variation notice is published, and
 
    (b) the day set out in the variation notice for the facility under sub-paragraph (3)(c).
 
Climate change agreements
     46. In this Schedule "climate change agreement" means-
 
 
    (a) an agreement that falls within paragraph 47, or
 
    (b) a combination of agreements that falls within paragraph 48.
 
Climate change agreements: direct agreement with Secretary of State
     47. - (1) An agreement (including one entered into before the passing of this Act) falls within this paragraph if it is an agreement-
 
 
    (a) entered into with the Secretary of State,
 
    (b) expressed to be entered into for the purposes of the reduced rate of climate change levy,
 
    (c) identifying the facilities to which it applies,
 
    (d) to which a representative of each facility to which it applies is a party,
 
    (e) setting, or providing for the setting of, targets for the facilities to which it applies,
 
    (f) specifying certification periods (as to which see paragraph 49(1)) for the facilities to which it applies, and
 
    (g) providing for five-yearly (or more frequent) reviews by the Secretary of State of targets set by or under the agreement for those facilities and for giving effect to outcomes of such reviews.
      (2) In this paragraph and paragraph 48 "representative", in relation to a facility to which an agreement applies, means-
 
 
    (a) the person who is the operator of the facility at-
 
      (i) the time the agreement is entered into, or
 
      (ii) if later, the time the facility last became a facility to which the agreement applies,
 
    or
 
    (b) a person authorised by that operator to agree to the facility being a facility to which the agreement applies.
 
Climate change agreement: combination of umbrella and underlying agreements
     48. - (1) A combination of agreements falls within this paragraph if the following conditions are satisfied.
 
      (2) The first condition is that the combination is a combination of-
 
 
    (a) an umbrella agreement (including one entered into before the passing of this Act), and
 
    (b) an agreement (including one entered into before the passing of this Act) that, in relation to the umbrella agreement, is an underlying agreement.
      (3) The second condition is that between them the two agreements-
 
 
    (a) set, or provide for the setting of, targets for the facilities to which the underlying agreement applies,
 
    (b) specify certification periods (as to which see paragraph 49(1)) for the facilities to which the underlying agreement applies, and
 
    (c) provide for five-yearly (or more frequent) reviews by the Secretary of State of targets set by or under the agreements for those facilities and for giving effect to outcomes of such reviews.
      (4) For the purposes of this paragraph an "umbrella agreement" is an agreement-
 
 
    (a) entered into with the Secretary of State,
 
    (b) expressed to be entered into for the purposes of the reduced rate of climate change levy,
 
    (c) identifying the facilities to which it applies, and
 
    (d) to which a representative of each facility to which it applies is a party.
      (5) For the purposes of this paragraph an agreement is an "underlying agreement" in relation to an umbrella agreement if it is an agreement-
 
 
    (a) expressed to be entered into for the purposes of the umbrella agreement,
 
    (b) entered into-
 
      (i) with the Secretary of State, or
 
      (ii) with a party to the umbrella agreement other than the Secretary of State,
 
    (c) approved by the Secretary of State if he is not a party to it,
 
    (d) identifying which of the facilities to which the umbrella agreement applies are the facilities to which it applies, and
 
    (e) to which a representative of each facility to which it applies is a party.
      (6) In the case of a climate change agreement that is a combination of agreements that falls within this paragraph, references to the facilities to which the climate change agreement applies are references to the facilities to which the underlying agreement applies.
 
 
Climate change agreement: supplemental provisions
     49. - (1) The first certification period specified by a climate change agreement for a facility to which it applies shall begin with the later of-
 
 
    (a) the date on which the agreement, so far as relating to the facility, is expressed to take effect, and
 
    (b) 1st April 2001;
       and each subsequent certification period so specified shall begin immediately after the end of a previous certification period.
 
      (2) Where a climate change agreement (the "new agreement") applies to a facility to which another climate change agreement previously applied, the first certification period specified by the new agreement for the facility shall be-
 
 
    (a) a period beginning as provided by sub-paragraph (1), or
 
    (b) a period that-
 
      (i) begins earlier than that, and
 
      (ii) is a period that was a certification period specified for the facility by any climate change agreement that previously applied to the facility.
      A period such as is mentioned in paragraph (b) includes a period beginning, or beginning and ending, before the date on which the new agreement, so far as relating to the facility, is expressed to take effect.
 
      (3) For the purposes of giving certificates such as are mentioned in paragraphs 44(1) and 45(1), the Secretary of State may take a facility as being covered by a climate change agreement for a period if the facility is one to which the agreement applies and either-
 
 
    (a) that period is the first certification period specified by the agreement for the facility, or
 
    (b) that period is a subsequent certification period for the facility and it appears to the Secretary of State that progress made in the immediately preceding certification period towards meeting targets set for the facility by the agreement or by a climate change agreement that previously applied to the facility is, or is likely to be, such as under the provisions of the agreement in question is to be taken as being satisfactory.
      (4) For the purposes of sub-paragraph (3)(b) a climate change agreement may (in particular) provide that progress towards meeting any targets for a facility is to be taken as being satisfactory if, in the absence (or partial absence) of any such progress required under the agreement, alternative requirements provided for by the agreement are satisfied.
 
      (5) For the purposes of sub-paragraphs (2) and (3), the circumstances in which a facility to which a climate change agreement applies is one to which another such agreement previously applied include those where the facility is-
 
 
    (a) a part, or a combination of parts, of a facility to which another such agreement previously applied,
 
    (b) a combination of two or more such facilities,
 
    (c) any combination of parts of such facilities, or
 
    (d) any combination of such facilities and parts of such facilities.
      (6) Paragraphs 47 and 48 and sub-paragraph (4) above are not to be taken as meaning that an agreement, or combination of agreements, containing provision in addition to any mentioned in those paragraphs and that sub-paragraph is not a climate change agreement.
 
      (7) For the purposes of paragraphs 47 and 48 and this paragraph "target", in relation to a facility to which a climate change agreement applies, means a target relating to-
 
 
    (a) energy, or energy derived from a source of any description, used in the facility or an identifiable group of facilities within which the facility falls, or
 
    (b) emissions, or emissions of any description, from the facility or such a group of facilities;
       and for this purpose "identifiable group" means a group that is identified in the agreement or that at any relevant time can be identified under the agreement.
 
      (8) Nothing in this Schedule is to be taken as requiring the Secretary of State to-
 
 
    (a) enter into any climate change agreement,
 
    (b) enter into a climate change agreement with any particular person or persons, in respect of any particular facility or facilities or on any particular terms, or
 
    (c) approve any, or any particular, proposed climate change agreement.
 
Facilities to which climate change agreements can apply
     50. - (1) This paragraph applies where, in connection with concluding or varying a climate change agreement, it falls to be determined whether a facility is to be, or is to continue to be, identified in the agreement as a facility to which the agreement applies.
 
      (2) For the purposes of such a determination "facility" is (subject to any regulations under sub-paragraph (3) or (4)) to be taken as meaning-
 
 
    (a) an installation covered by paragraph 51; or
 
    (b) a site on which there is or are-
 
      (i) such an installation or two or more such installations,
 
      (ii) a part, or parts, of such an installation,
 
      (iii) a part, or parts, of each of two or more such installations, or
 
      (iv) any combination of such installations and parts of such installations.
      (3) The Secretary of State may by regulations make provision for an installation covered by paragraph 51 to be taken to be a facility for those purposes only if-
 
 
    (a) the taxable commodities supplied to the installation by taxable supplies are intended to be burned (or, in the case of electricity, consumed)-
 
      (i) in the installation, or
 
      (ii) on the site where the installation is situated but not in the installation,
 
    and
 
    (b) the amounts of taxable commodities, and of any other commodities specified in the regulations, subject to each of those intentions are such that any conditions specified in the regulations are satisfied.
      (4) The Secretary of State may by regulations make provision for a site to be taken to be a facility for those purposes only if-
 
 
    (a) the taxable commodities supplied to the site by taxable supplies are intended to be burned (or, in the case of electricity, consumed)-
 
      (i) in installations on the site that are covered by paragraph 51 (or in parts of such installations), or
 
      (ii) on the site but not in any such installation (or part of such an installation),
 
    and
 
    (b) the amounts of taxable commodities, and of any other commodities specified in the regulations, subject to each of those intentions are such that any conditions specified in the regulations are satisfied.
      (5) Regulations under sub-paragraph (3) or (4) may make provision for deeming, for the purposes of the regulations, commodities to be intended to be burned (or, in the case of electricity, consumed) in circumstances specified in the regulations.
 
      (6) In this paragraph and paragraph 51 "installation" means a stationary technical unit.
 
 
Energy-intensive installations
     51. - (1) An installation is covered by this paragraph if it falls within any one or more of the descriptions of installation set out in the Table.
 
      (2) An installation is also covered by this paragraph if it is on the same site as, and ancillary to, an installation falling within any one or more of those descriptions.
 
      (3) Sub-paragraphs (1) and (2) are subject to any regulations under paragraph 52.
 
      (4) For the purposes of sub-paragraph (2), one installation ("the ancillary installation") is ancillary to another ("the primary installation") if-
 
 
    (a) the ancillary installation does not fall within any of those descriptions,
 
    (b) activities ("the ancillary activities") are carried out at the ancillary installation that are directly associated with any of the primary activities carried out at the primary installation, and
 
    (c) the ancillary activities-
 
      (i) have a technical connection with those primary activities, and
 
      (ii) could have an effect on environmental pollution or emissions capable of causing such pollution.
      (5) However, an installation (or part of an installation) used for research, development and testing of new products and processes does not fall within any of those descriptions.
 
      (6) In sub-paragraph (4)-
 
 
    "environmental pollution" has the same meaning as in the Pollution Prevention and Control Act 1999;
 
    "primary activity", in relation to an installation falling within any one or more of the descriptions of installation set out in the Table, means an activity the carrying out of which at the installation results in the installation falling within one or more of those descriptions.
  TABLE
  DESCRIPTIONS OF ENERGY-INTENSIVE INSTALLATIONS
 
Energy industries
     1. - (1) Combustion installations with a rated thermal input exceeding 50 MW.
 
      (2) Combustion installations operated by the same operator on the same site with a combined rated thermal input exceeding 50 MW.
 
     2. Mineral oil and gas refineries.
 
     3. Coke ovens.
 
     4. Coal gasification and liquefaction plants.
 
 
Production and processing of metals
     5. Metal ore (including sulphide ore) roasting or sintering installations.
 
     6. Installations for the production of pig iron or steel (primary or secondary fusion) including continuous casting.
 
     7. - (1) The following installations for the processing of ferrous metals-
 
 
    (a) hot-rolling mills;
 
    (b) smitheries with hammers.
      (2) Installations for the processing of ferrous metals by the application of protective fused metal coats.
 
     8. Ferrous metal foundries.
 
     9. Installations-
 
 
    (a) for the production of non-ferrous crude metals from ore, concentrates or secondary raw materials by metallurgical, chemical or electrolytic processes;
 
    (b) for the smelting, including the alloyage, of non-ferrous metals, including recovered products (refining, foundry casting, etc.).
     10. Installations for surface treatment of metals and plastic materials using an electrolytic or chemical process.
 
 
Mineral industry
     11. Installations for the production of-
 
 
    (a) cement clinker in rotary kilns, or
 
    (b) lime in rotary kilns or other furnaces.
     12. Installations for the production of asbestos and the manufacture of asbestos-based products.
 
     13. Installations for the manufacture of glass including glass fibre.
 
     14. Installations for melting mineral substances including the production of mineral fibres.
 
     15. Installations for the manufacture of ceramic products by firing, in particular roofing tiles, bricks, refractory bricks, tiles, stoneware, stoneware or porcelain.
 
 
Chemical industry
     16. Installations for the production, on an industrial scale by chemical processing, of basic organic chemicals such as-
 
 
    (a) simple hydrocarbons (linear or cyclic, saturated or unsaturated, aliphatic or aromatic);
 
    (b) oxygen-containing hydrocarbons such as alcohols, aldehydes, ketones, carboxylic acids, esters, acetates, ethers, peroxides, epoxy resins;
 
    (c) sulphurous hydrocarbons;
 
    (d) nitrogenous hydrocarbons such as amines, amides, nitrous compounds, nitro compounds or nitrate compounds, nitriles, cyanates, isocyanates;
 
    (e) phosphorus-containing hydrocarbons;
 
    (f) halogenic hydrocarbons;
 
    (g) organometallic compounds;
 
    (h) basic plastic materials (polymers, synthetic fibres and cellulose-based fibres);
 
    (i) synthetic rubbers;
 
    (j) dyes and pigments;
 
    (k) surface-active agents and surfactants.
     17. Installations for the production, on an industrial scale by chemical processing, of basic inorganic chemicals such as-
 
 
    (a) gases, such as ammonia, chlorine or hydrogen chloride, fluorine or hydrogen fluoride, carbon oxides, sulphur compounds, nitrogen oxides, hydrogen, sulphur dioxide, carbonyl chloride;
 
    (b) acids, such as chromic acid, hydrofluoric acid, phosphoric acid, nitric acid, hydrochloric acid, sulphuric acid, oleum, sulphurous acids;
 
    (c) bases, such as ammonium hydroxide, potassium hydroxide, sodium hydroxide;
 
    (d) salts, such as ammonium chloride, potassium chlorate, potassium carbonate, sodium carbonate, perborate, silver nitrate;
 
    (e) non-metals, metal oxides or other inorganic compounds such as calcium carbide, silicon, silicon carbide.
     18. Installations for the production, on an industrial scale by chemical processing, of phosphorous-based, nitrogen-based or potassium-based fertilizers (whether simple or compound).
 
     19. Installations for the production, on an industrial scale by chemical processing, of basic plant health products and of biocides.
 
     20. Installations using a chemical or biological process for the production, on an industrial scale, of basic pharmaceutical products.
 
     21. Installations for the production, on an industrial scale by chemical processing, of explosives.
 
 
Waste management
     22. Installations for the disposal or recovery of hazardous waste as defined in-
 
 
    (a) the list referred to in Article 1(4) of Council Directive 91/689/EEC,
 
    (b) Annex IIA, and headings R1, R5, R6, R8 and R9 of Annex IIB, to Council Directive 75/442/EEC, and
 
    (c) Council Directive 75/439/EEC.
     23. Installations for the incineration of municipal waste as defined in-
 
 
    (a) Council Directive 89/369/EEC, and
 
    (b) Council Directive 89/429/EEC.
     24. Installations for the disposal of non-hazardous waste as defined in headings D8 and D9 of Annex IIA to Council Directive 75/442/EEC.
 
     25. Landfills other than landfills of inert waste.
 
 
Other activities
     26. Industrial plants for the production of-
 
 
    (a) pulp from timber or other fibrous materials;
 
    (b) paper and board.
     27. Plants for the pre-treatment (operations such as washing, bleaching, mercerisation) or dyeing of fibres or textiles.
 
     28. Plants for the tanning of hides and skins.
 
     29. - (1) Slaughterhouses.
 
      (2) Installations for-
 
 
    (a) the production of food products by the treatment and processing of-
 
      (i) animal raw materials (other than milk), or
 
      (ii) vegetable raw materials;
 
    (b) the treatment and processing of milk.
     30. Installations for the disposal or recycling of animal carcases and animal waste.
 
     31. Installations for the intensive rearing of poultry or pigs.
 
     32. Installations for the surface treatment of substances, objects or products using organic solvents, in particular for dressing, printing, coating, degreasing, waterproofing, sizing, painting, cleaning or impregnating.
 
     33. Installations for the production of carbon (hard-burnt coal) or electrographite by means of incineration or graphitization.
 
 
Power to vary the installations covered by paragraph 51
     52. - (1) The Treasury may make provision by regulations for varying the installations covered by paragraph 51.
 
      (2) The provision that may be made by regulations under this paragraph includes, in particular, provision-
 
 
    (a) for the installations covered by paragraph 51 to include, or not to include, any installation of a description specified in the regulations;
 
    (b) amending the Table in paragraph 51 by adding a description of installation to the Table, removing a description of installation from the Table or altering a description of installation set out in the Table;
 
    (c) amending paragraph 51.
 
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