Category: customs and excise

Regina (Drax Power Ltd and another) v HM Treasury and another [2016] EWCA Civ 1030

‘The claimants who were renewable source electricity generators brought proceedings for judicial review challenging the decision of the Government, announced in the Budget statement on 8 July 2015 and to take effect on 1 August 2015, to remove the exemption for renewable source electricity (“RSE”) from the Climate Change Levy (“CCL”), an environmental tax levied on electricity, gas, solid fuels and liquefied petroleum gas supplied to business and the public sector. Use by domestic consumers was excluded from the CCL. Article 15 of Council Directive 2003/96/EC permitted member states to apply exemptions or reductions in tax to electricity of renewable origin, and article 3 of the Parliament and Council Directive 2009/28/EC obliged them to ensure by 2020 at least 15% of all energy came from renewable sources. The removal of the exemption was provided in section 49 of the Finance (No 2) Act 2015, amending paragraph 19 of Schedule 6 to the Finance Act 2000. The judge dismissed the claimants’ claim for judicial review, holding that (1) the exemption fell within the scope of European Union law; (2) the claimants had failed to establish an express or inferred assurance that the Government had promoted a legitimate expectation not to withdraw the RSE exemption, that there was no basis for the contention that there had to be a two-year time limit for any withdrawal and that a prudent and circumspect operator should not have inferred that the exemption would not be removed without such a time limit; and (3) on the evidence the exemption’s removal had been justified in the public interest and, notwithstanding its evident harm to the claimants’ private interests and right to property in the form of concluded contracts to supply companies, came within the appropriate margin of discretion.’

WLR Daily, 21st October 2016

Source: www.iclr.co.uk