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Climate change levy
Customs and Excise have published a new extra-statutory concession, exempting certain recycling processes from climate change levy. Production processes are exempt from the levy where there is a 'dual fuel' or 'non-fuel' use of energy, putting recycling processes making the same products at a competitive disadvantage. The new concession exempts those environmentally friendly recycling processes as well.
Climate change levy
Customs and Excise have published a new extra-statutory concession, exempting certain recycling processes from climate change levy. Production processes are exempt from the levy where there is a 'dual fuel' or 'non-fuel' use of energy, putting recycling processes making the same products at a competitive disadvantage. The new concession exempts those environmentally friendly recycling processes as well.
The exemption applies only to recycling processes which produce the same output as processes eligible for exemption from the levy under paragraph 18 of Schedule 6 to the Finance Act 2000 and the Climate Change Levy (Use as Fuel) Regulations 2001. The relevant processes must also be less energy intensive and liable to a higher charge per tonne of output than the competing primary process. The full text of the concession is available from the climate change levy team and has also been published on the Customs and Excise website.
(Source: Customs Business Brief 18/2002 dated 8 July 2002.)
Consultation on import VAT
The Economic Secretary, John Healey has launched a consultation document to ease the current import VAT régime. Most goods imported into the United Kingdom from outside the European Union are liable to VAT, which is payable at the time goods are imported - along with other customs and excise duties - with importers then having to re-claim the tax paid on their VAT returns. This has a significant impact on compliance costs and cash flow and is estimated to cost businesses £175 million per year.
The consultation document (which can be found on Customs' website at www.hmce.gov.uk/news/nat-nr-5702.htm) explains the proposals (including the suggestion that the payment of VAT will be deferred until the submission of the VAT return) in more detail. The aim is to implement the scheme in the next financial year. The press release notes that 'To ensure that this reform does not provide an opportunity for criminals to defraud the revenue or allow unscrupulous businesses to gain an unfair advantage, it will be necessary to ensure that the proposed new system is only available to those businesses whose compliance can be assured'.
Customs require responses to this consultation by 31 October 2002.
(Source: Customs news release dated 17 July 2002.)
