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HMRC internal manual

Venture Capital Schemes Manual

Excluded activities: all energy generating activities

ITA07/S192 (1) (ka-kd); ITA07/S303(1) (kb) (kc) (kd)

For shares or holdings issued on or after 6 April 2016, the legislation excludes any form of energy generating activity, including:

  • the generation or export of electricity (including storage activities), whether subsidised or unsubsidised
  • production of gas or other fuel
  • the generation of heat
  • renewable sources of energy generation.

The activities of research and development of innovative generation technologies or the manufacture, production and sale of such technology are not excluded by the legislation.

ITA07/S198A; ITA07/S309A

Definition of ‘export of electricity’

‘Export of electricity’ is defined as the export of electricity onto a distribution system or transmission system (within the meaning of Section 4 of the Electricity Act 1989).

History of changes to energy generating activities in 2012, 2014 and 2015

Various forms of subsidised energy and specific reserve power generating activities had been excluded by changes to the legislation made in 2012, 2014 and 2015. However, these exclusions have now been superseded by the general exclusion on all energy generating activities.

The changes in 2012, 2014 and 2015 are detailed below for information only:

1. Excluded activities for shares or holdings acquired on or after 6 April 2012 and before 6 April 2014

The generation or export of electricity in respect of which any person received a Feed-in Tariff (FIT) or a similar overseas scheme. Not including trades which involve anaerobic digestion or hydroelectric power or those undertaken by community energy organisations (Community Interest Companies, Community Benefit Societies, Co-ops or Northern Irish Industrial or Provident Societies).

2. Excluded activities for shares or holdings acquired for shares or holdings on or after 17 July 2014 and before 6 April 2015

As in (1) above and in addition: the generation of electricity, heat, or the production of gas or fuel which attracts Renewables Obligation Certificates (ROCs) or payments under the Renewable Heat Incentives (RHI) scheme (or similar overseas schemes). Not including trades which involve anaerobic digestion or hydroelectric power or those undertaken by community energy organisations.

3. Excluded activities for shares or holdings on or after 6 April 2015 and before 30 November 2015

As in (1) and (2) above and in addition now including activities which involve anaerobic digestion or hydroelectric power along with any that benefit from Contracts for Difference (CFDs) but activities undertaken by community energy organisations continue to be allowed.

4. Excluded activities for shares or holdings on or after 30 November 2015 and before 6 April 2016

As in (1), (2) and (3) above and including activities concerning the provision of reserve energy generating capacity – STOR or Capacity Management – and the exemption for activities by community energy organisations is now removed.