One note of caution when arranging your post-CRC finances. CRC, as a tax, ends from the 1st of April, 2019 – although in practical terms, it won’t be completely finished until October 2019, when the final allowances are surrendered, says carbon compliance expert Andy Greenall.
Critically, the final CRC payment isn’t due until September 2019*.
This is crucial because the higher rate of CCL becomes payable from 1st April 2019, and will thus start hitting cashflow from early May.
The final CRC payment isn’t due until September 2019
Depending on how your CRC accrual is set up, there can therefore be a six-month period – from April to September – when you’re paying the higher rate of CCL, and still accruing for the final CRC payment. It’s worth ascertaining well in advance that your finance team are aware of this.
Of course, when the dust finally settles, former CRC participants are likely to be better off under the new arrangement – in many cases, significantly so. But this benefit won’t be apparent until the final CRC payment is confirmed (in June or July 2019) and fully accrued for.
* From 2014 CRC has offered the option of ordering and paying for allowances in advance (“Forecasting”), so since then not all participants have had to make a retrospective allowance payment in the September following the CRC year. However, as no refunds will be available for any post-CRC surplus allowances, even most Forecast users – apart from those with a surplus – will need to make a final retrospective payment.