EGL72000 - Administration of EGL: additional reporting requirements

F(2)A23/S303(4) requires a company liable to the EGL to include a statement of certain additional matters with its CT return and also to make a return if it would not otherwise be liable to do so, for example: where it would not otherwise be within the charge to CT.

The additional matters to be included in the statement are the following amounts for the qualifying period that corresponds to or falls within the company’s accounting period –

  • the electricity generation attributed to the generating undertaking, see EGL23000+.
  • the undertaking’s generation receipts, see EGL23200
  • the allowable costs to be deducted from those receipts, see EGL24000+.
  • the undertaking’s revenue allowance for that period
  • where relevant, the amount of EGL payable by another group company as a result of any election under F(2)A23/S290, see EGL54000

F(2)A23/S303(3) explains that the above information does not need to be provided for an accounting period where the revenue allowance is clearly sufficient to cover an undertaking’s net generation receipts (meaning here the amount after deducting allowable costs at Step 4 of F(2)A23/S279(5).  This is expressed in the legislation by asking whether is reasonable to assume that the result after deducting the revenue allowance at Step 5 of F(2)A23/S279(5) would be significantly less than nil.  In effect: are the net generation receipts substantially less than the available allowance?

HMRC would generally accept that where the difference between the net generation receipts and the available revenue allowance for the accounting period is 10% or more of the available allowance, then the requirement would be met. 

Examples 

In its accounting period ending 30 June 2025 a single company generating undertaking has generation receipts of £4 million.  This is clearly substantially less than the available revenue allowance of £10 million. 

In its accounting period ending 31 December 2026 a group generating undertaking has generation receipts of £12 million and allowable costs of £4 million giving net generation receipts of £8 million.  Deducting the revenue allowance of £10 million gives a negative figure of £2 million which is 20% of the available allowance.  In other words, the net generation receipts are 20% less than the revenue allowance.

The operation of this rule does not affect HMRC’s ability to enquire into the reasonableness of the calculation of receipts and costs, where appropriate.

See also EGL75000 which explains the additional information that must be provided when a company makes a payment of EGL.