1 Mins
For accounting periods ending between 1 January 2023 and 31 December 2028, companies that have electrical generation receipts may be subject to a levy of 45% on those receipts. If the company generates 50,000 megawatt hours in a year (pro-rated if it straddles the start or end dates), it will have to determine whether it has made exceptional generation receipts which has a number of steps in order to calculate this. The levy will only apply to exceptional receipts exceeding £10 million in an accounting period.
A relevant generating station for the purposes of the levy is one that is not a generating station that mainly generates electricity:
- As a result of the burning of oil, coal, or natural gas, or
- As a result of the use of plant driven by water, where the power is mainly as a result of the hydrostatic head of the water having been increased by pumping.
There are other conditions to this, such as the income not being subject to specific contracts for difference, and there are specific definitions that form part of the calculations which will need to be looked at in detail on a case by case basis.