Domestic reverse charge ― trading in carbon emissions

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides an overview of the reverse charge provisions relating to trading in carbon emissions. This note should be read in conjunction with the Domestic reverse charge ― overview and Domestic reverse charge ― accounting requirements guidance notes.

What are carbon credits / emissions allowances?

According to HMRC guidance, only those compliance market credits which can be used to meet obligations under the EU Emissions Trading Scheme (EUETS) were subject to the UK domestic reverse charge mechanism. These comprised of EU Allowances, as defined in Directive 2003/87/EC (as amended). Some Certified Emission Reductions (CERs) and some Emission Reduction Units (ERUs), as defined in the Directive, were also were subject to the UK domestic reverse charge.

The UK is no longer a member of the EU and is no longer part of the above schemes and, as a result, from 1 May 2021, the CERs and ERUs are no longer within the scope of the UK domestic reverse charge.

At the beginning of 2021, a new UK Emissions Trading

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Owner-Managed Businesses

Allowable deductions for employee-related expenses

Allowable deductions for employee-related expensesThis guidance note covers the tax treatment of some common types of trading expenditure relating to employees. Some of these are disallowable under general principles, for example the wholly and exclusively test or capital versus revenue expenditure.

14 Sep 2022 09:49 | Produced by Tolley Read more

Corporation Tax

Foreign exchange issues

Foreign exchange issuesOverview of foreign exchange provisionsForeign exchange (FX) movements are generally taxed following the rules applicable to the underlying income, expenditure, asset or liability on which they arise, broadly as follows:Capital assetsOn a realisation basis (ie on disposal)

14 Jul 2020 11:44 | Produced by Tolley Read more

Personal Tax

Self assessment ― amendments and corrections

Self assessment ― amendments and correctionsOnce a self assessment tax return has been filed, both HMRC and the taxpayer (or the agent) has the right to make changes to the return. There are different time limits depending on whether it is a correction by HMRC or an amendment made by the

14 Jul 2020 13:37 | Produced by Tolley Read more

��Ƶ