Guidance

Correcting Climate Change Levy errors

If you're an electricity producer or energy supplier, find out how to correct errors and what to do if you've paid too little or too much levy.

• From: HM Revenue & Customs
• Published: 28 August 2019
• Last updated: 30 March 2023 — See all updates

Correct an error on a return up to £50,000

Correct errors up to a maximum of £50,000 on previous returns by adjusting your next return. Record the adjustment in your levy account and the reason for it.

Correct an error on a return over £50,000

Write to HMRC about the error. Tell us:

• the error amount

• the accounting period

• which boxes on the return were under or over-stated

• an explanation of how the error happened

Credit notes when you’ve overcharged a customer

If you’re a supplier and you wrongly overcharge a customer, you must issue a credit note to them. Account for the credit note in the same accounting period that you correct your business accounts.

If the error and the correction are made in the same accounting period, treat it as a current period adjustment. If it’s corrected later deal with it as an error on your return.

Claiming a credit when you’ve been overcharged

This usually happens when:

• you charged the main rate on a supply and should have charged the reduced rate or nothing

• you already declared it in a previous return and then declared again by mistake

• your customer is not entitled to claim a tax credit to adjust the relief they claimed on their relief certificate

The tax credit is an over-declaration of the levy. Account for it on your return if the total cumulative over-declarations are within £50,000 (£10,000 for non-VAT-registered companies).

If the over-declaration total is over this amount write to HMRC about the error. Tell us:

• the error amount

• the accounting period

• which boxes on the return were under or over-stated

• an explanation of how the error happened

## Guidance with a force of law

Find out about the force of law for this guidance.

Published 28 August 2019
Last updated 30 March 2023 + show all updates

1. 30 March 2023

   A link to Climate Change Levy force of law guidance has been added.

2. 28 August 2019

   First published.