EGL32000 - Groups: which member of a group is responsible for EGL?

The EGL is charged on the receipts of a “generating undertaking” which may be a single company or a group of companies. Where the undertaking is a group then it is necessary to identify the group member that is responsible for reporting and paying the EGL liability to HMRC and determining the basis period for the calculation of the group’s EGL receipts and the amount of levy due. The rules are at F(2)A23/S288.

EGL is reported using the corporation tax administration rules, see EGL71000. The additional reporting requirements for EGL are explained at EGL72000.

Because a single group company is responsible for the EGL liability of the whole group, the members of the group share joint and several liability for the payment of the amount due to HMRC, F(2)A23/S289.

Identifying the group member responsible for reporting and paying EGL liability

The group member responsible for reporting EGL liability is described as the “lead member”. There is a statutory mechanism for identifying this company but a group may nominate another company that is within the charge to corporation tax. In the absence of a nomination, the rules identify the lead member in the following order –

  1. the principal member of the group, as defined by F(2)A23/S287, provided it is within the charge to corporation tax.
  2. the company that would be the principal member but for it being the 75% subsidiary of a company that is not within the charge to corporation tax.
  3. where there is more than one company that would meet the condition above, then it will be the company meeting that condition that has the highest amount of electricity generation attributable to it treating each such company and its subsidiaries as a separate generating undertaking.
  4. where there is no company meeting any of the above conditions, then the lead company will be the non-UK principal member of the group.

For the purposes of item 3 above, the amount of electricity generation is that in the calendar year 2022 for a group that generates electricity above the levy threshold of 50 GWh in that period. Where the threshold is only exceeded in a later period, then the assessment is based on the generation in the 12 months ending before the start of the period in which the threshold is exceeded.

In practice, we expect many groups to prefer to nominate a lead member. The nomination procedure is described at EGL33000.