Wednesday 21 March 2012
Commenting on today’s announcement that the Government may simplify or even scrap the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, Ben Wielgus lead CRC advisor at KPMG said:
“Today’s announcement risks creating greater uncertainty amongst businesses, but in reality it’s nothing new.
“Simplification proposals are already expected imminently from the Department of Energy and Climate Change (DECC) and the information we’ve seen indicates that significant savings can be achieved from a revised version of the CRC.
“Should significant savings not be deliverable, the Government has announced that it may consider replacing CRC revenues with an alternative environmental tax, although details of any new tax have not yet been released.
“Whilst many have proposed tax increases (such as raising the climate change levy), and these would be far simpler than the CRC, the introduction of a tax alone would be unlikely to deliver on all aspects of the CRC: namely the reputational drivers and focus on energy usage that are core to the scheme at present. To deliver the same objectives as the CRC, any new tax would need to incorporate similar reporting requirements. Any reporting requirements would create an administrative burden on business and would need to be carefully designed to ensure that any replacement actually reduces administrative costs compared to the CRC.
“We support the reduction of the administrative burden on business but also recognise the need for a level playing field on carbon legislation which helps the Government meet its climate change targets.”
Ends
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
