Climate change taxation reforms and incentives in the UK

1. Has your country ratified the Paris Agreement? 

Yes (ratified in 2016)

2. Has your country introduced environmental taxes?

2.1 Energy taxes

Climate Change Levy (CCL) on electricity, gas and solid fuels (including coal, lignite, coke and petroleum coke). It is also possible to claim capital allowances on energy-efficient items.

2.2 Transport Taxes

Fuel duty, Road tax, Vehicle Excise Duty, VAT on fuel and vehicle sales and Air Passenger Duty.

2.3 Pollution taxes

Landfill Tax on top of your normal landfill fees if your business gets rid of waste using landfill sites.

2.4 Resources taxes

Aggregate Levy on sand, gravel and rock that has either been (i) dug from the ground, (ii) dredged from the sea in UK waters, or (iii) imported. 

3. Has your country introduced a carbon tax?

No, however there is current government discussion on the proposed introduction of a carbon emissions tax (https://www.gov.uk/government/publications/carbon-emmisions-tax/carbon-emmisions-tax

4. Does your country offer sustainability incentives (tax credits, subsidies or other business incentives) to encourage taxpayers to engage in behaviours and develop technologies that can impact positively the environment? 

Yes, for example, the government has introduced a Domestic Renewable Heat Incentive – a financial incentive to encourage a switch to renewable heating systems.

5. Has your country recently announced tax reforms connected to climate change? 

The 2019 Conservative Party manifesto lists a number of reforms relevant to climate change, including: investing in research and development decarbonisation schemes, new flood defences, renewable growth and clean transport to ensure clean air. 

6. Other comments

For further information on UK measures see the government website at https://www.gov.uk/green-taxes-and-reliefs

Portrait ofAnna Burchner
Anna Burchner
Partner
London