Do I still pay the Climate Change Levy if I qualify for 5% VAT?

Last reviewed 2 September 2026 by Utilities Made Simple · independent, whole-of-market, supplier-paid — how we are paid

The rule

The two reliefs travel together. Whichever route gets you to 5% VAT — de minimis low usage, charitable non-business use, or 60% or more domestic use — also takes the supply out of CCL. There is no separate CCL declaration to complete; the VAT declaration does both.

What CCL is costing you

It rose from 0.775p to 0.801p per kWh on 1 April 2026 and applies to electricity and gas at the same rate. On a site using 50,000 kWh of electricity a year that is around £400 before VAT — not the largest line on the bill, but not one to pay unnecessarily either.

If your bill shows both

1. Check the VAT rate actually applied on the bill, not the rate you believe you are on.
2. If it says 5% and CCL is still charged, email the supplier quoting both lines and ask for the CCL to be removed and refunded.
3. Ask for the correction to be backdated to the date the declaration took effect.

The separate route: Climate Change Agreements

Energy-intensive businesses in eligible sectors can hold a Climate Change Agreement, which gives a substantial CCL discount in exchange for meeting efficiency targets. That is a different scheme with its own administration, and it is unrelated to the 5% VAT routes above — but if you are in manufacturing, it is worth knowing it exists.

Ask an energy specialist

If your question is not answered above, send it to us. A specialist answers personally, normally within one working day. No sales call, no obligation — and if the answer is "your deal is fine", that is what you will get.