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HMRC internal manual

Securities Guidance

From
HM Revenue & Customs
Updated
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Calculating the amount of security: the quantum calculation: estimating future revenue risk using taxable turnover: Climate Change Levy

It is possible to calculate the amount required in security by estimating future liability based on the registrable person’s estimated ‘taxable turnover’.

The person includes an estimate of energy units supplied for business and domestic/non-business use in the CCL1 registration document. Non-business/domestic used is exempt from Climate Change Levy.

You may use the estimates of energy units supplied for business use to formulate the quantum. Always round up the figure.

Examples

All rates quoted are correct at 1 April 2012.

Estimate of electricity units supplied 5,000,000 x rate per unit £0.00509 / 2 = six month quantum of £12,725.00.

Estimate of gas units supplied 5,000,000 x rate per unit £0.00177 / 2 = six month quantum of £4,425.00.

(there is a lower rate per unit for Northern Ireland of 0.00062)

Estimate of petroleum gas units supplied 5,000,000 x rate per unit £0.01387 / 2 = six month quantum of £28,425.00.

Estimate of ‘any other taxable commodity’ units supplied 5,000,000 x rate per unit £0.01387 / 2 = six month quantum of £34,675.00.

If the CCL1-estimated taxable turnover is all the information you have, consider issuing a warning letter to prompt the person to provide more information on which to base your calculation of the amount of security.

It is essential that you keep a written record of how you came to your decision on the amount of security. This will be invaluable if the person appeals to tribunal or requests a review, see SG70200.