Climate Change Levy

Treasury written question – answered on 2nd July 2001.

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Photo of David Maclean David Maclean Conservative, Penrith and The Border

To ask the Chancellor of the Exchequer how much VAT revenue he forecasts will be raised in the current financial year as a result of the introduction of the climate change levy and consequent application of VAT.

Photo of Mr Paul Boateng Mr Paul Boateng Financial Secretary, HM Treasury, The Financial Secretary to the Treasury

Business will be able to reclaim the majority of VAT paid on the Climate Change Levy (CCL). We estimate therefore that the introduction of the CCL might lead to additional VAT receipts of around £30 million, significantly below the £1 billion expected to be raised by the levy in the first year. All revenues from the CCL will be recycled back to business through a 0.3 percentage point cut in employers' national insurance contributions and additional support for energy-efficient measures and energy-saving technologies.

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