Official Statistics

Quality Report: Environmental Taxes Bulletin

Published 21 October 2022

1. Contact information

The Environmental Taxes Bulletin statistics release and this Quality Report are produced by the HM Revenue and Customs (HMRC) Indirect Tax Receipts Monitoring team, part of the Knowledge, Analysis, and Intelligence (KAI) directorate.

Contact [email protected] for any queries about this Quality Report or the statistics release.

2. Data description

This publication provides a breakdown of historical receipts and liabilities for environmental taxes, which includes

• Climate Change Levy (CCL)

• Carbon Price Floor (CPF) - also known as Carbon Price Support (CPS)

• Aggregates Levy (AGL)

• Landfill Tax (LFT)

The publication includes receipts statistics which are up to the latest full month before the bulletin’s release. It also includes statistics relating to liabilities which are one month behind that of duty receipts.

Liabilities statistics relate to when traders accrue tax liabilities through the provision of a service.

This publication only includes figures for previous years. Forecasts of future CCL, AGL and LFT receipts are produced and published by the Office for Budget Responsibility (OBR), and can be found on their website.

2.1 Classification system

Returns data, which are processed through a variety of internal HMRC systems (detailed in the “Source data” section), help to classify the data reported in the Environmental Taxes Bulletin across the different taxes featured.

A unique taxpayer reference (UTR) number is assigned to each registered UK trader. These UTRs are used during the data aggregation process.

2.2 Tax coverage

The Climate Change Levy is chargeable on the industrial and commercial supply of taxable commodities for lighting, heating and power by consumers in the following sectors:

• industry

• commerce

• agriculture

• public administration

• other services

Carbon Price Floor - also known as Carbon Price Support (CPS) - is a tax on fossil fuels used in the generation of electricity. It was achieved through changes to the existing CCL regime for gas, solid fuels and liquefied petroleum gas (LPG) used for electricity generation.

Landfill Tax is a tax paid by landfill operators on the disposal of material at a landfill site. The tax is passed onto businesses and local authorities through the gate fee for disposing of waste at a landfill.

Aggregates Levy is a tax on the commercial exploitation in the UK of rock, sand and gravel, and is due from any business that quarries, dredges or imports these products.

2.3 Variable definitions

CCL receipts

The amount of CCL paid to HMRC. This is revenue reported in the bulletin.

CPF receipts

The amount of CPF paid to HMRC. This is revenue reported in the bulletin.

Electricity declarations

Taxable supplies of electricity as declared by registered CCL/CPF providers.

Gas declarations

Taxable supplies of natural gas declared as supplied by a gas utility.

Solid and other fuels declarations

Taxable supplies of petroleum and hydrocarbon gas in a liquid state, coal, lignite, coke or semi coke of coal or lignite declared by registered CCL/CPF providers.

AGL total cash receipts

The amount of AGL paid to HMRC. This is revenue reported in the bulletin.

AGL Taxable tonnage

The quantity of aggregate declared including Relived tonnage but not including Exempt tonnage.

AGL Relieved tonnage

Quantity of aggregate falling into any of the following categories:

• Materials exported from the UK in the form of aggregate (including to the Isle of Man and Channel Islands)
• Aggregates used in specific industrial and agricultural processes
• Aggregates disposed of as waste

AGL Exempt tonnage

Quantity of aggregate falling into any of the following categories:

• certain materials such as slate, clay, soil and vegetable or other organic matter
• aggregate arising as a by-product of specific processes
• aggregate produced by specific exempt processes such as producing lime or cement from limestone

AGL Total tonnage

The total of Taxable tonnage and Exempt tonnage.

AGL Levy declared

Total liabilities arising from AGL declarations.

LFT Standard rate tonnage

Quantity of all taxable disposed materials for which the Lower rate does not apply but including all disposables at unauthorised sites.

LFT Lower rate tonnage

Quantity of disposed non-hazardous or less polluting materials.

LFT Exempt tonnage

Materials disposed for dredging, mining and quarrying waste, pet cemeteries, filling of quarries or waste from visiting forces.

LFT Total tonnage

The total of Standard rate tonnage, Lower rate tonnage and Exempt tonnage.

LFT Total cash receipts

The amount of LFT paid to HMRC. This is revenue reported in the bulletin.

Financial year

The statistics are aggregated into financial years. A financial year stretches from 1 April until 31 March the following calendar year.

2.4 Statistical unit

The unit in the statistics is businesses and other entities required to pay either CCL, CPF, AGL or LFT within the UK.

2.5 Time coverage

The statistics cover the following time periods:

• for CCL and CPF from financial year 2001 to 2002

• for LFT from financial year 1997 to 1998

• for AGL from financial year 2002 to 2003

until the latest financial year for which a complete set of returns are available.

3. Statistical processing

3.1 Source data

Climate Change Levy

The data used to compile the Climate Change Levy data (from which data is calculated for CPF) comes from these sources:

• cash receipts are taken from Cash Operational Banking Reconciliation Activity (COBRA)

• cash repayments are taken from the Customs and Excise Core Accounting System (CECAS)

• liabilities data are taken from a bespoke HMRC internal accounting system

The bulletin may include negative receipts statistics when claims for repayments are larger than payments.

Total declarations and individual fuel (electricity, gas, and solid and other fuels) declarations statistics are sourced from CCL tax returns submitted to HMRC by registered taxpayers.

Aggregates Levy

The data used to compile the AGL data comes from these sources:

• cash receipts are taken from the Enterprise Tax Management Platform (ETMP)

• declared liabilities are taken from tax returns from registered AGL taxpayers, which are taken from ETMP

The data source for ‘Taxable Tonnage’, ‘Relieved Tonnage’ and ‘Exempt Tonnage’ statistics is the tax returns from the registered AGL taxpayers (form AL 100). These statistics are reported according to the last month of the taxpayers’ accounting/liability period.

‘Levy Declared on Trader Returns’ refers to the amount of tax declared on tax returns submitted for each calendar month. The source of this data is the information provided by traders on the Aggregates Levy return through form AL 100.

Landfill Tax

The data used to compile the LFT data comes from these sources:

• cash receipts are taken from the Enterprise Tax Management Platform (ETMP)

• declared liabilities are taken from tax returns from registered LFT taxpayers which are taken from ETMP

The data source for ‘waste tonnage’, ‘credit claimed’ and ‘net tax declared’ statistics is the tax returns from the registered LFT taxpayers (form ‘LT 100’). These statistics are reported according to the last month of the taxpayers’ accounting/liability period.

3.2 Frequency of data collection

Receipts data for CCL, AGL and LFT are downloaded each month for internal analysis and reporting. Receipts for these taxes are also published externally within the monthly HMRC tax receipts and National Insurance contributions for the UK National Statistics release.

Other data used in the Environmental Taxes Bulletin (such as taxable tonnage data for AGL and LFT) are downloaded on an annual basis.

3.3 Data collection

Receipts data for CCL, AGL and LFT are downloaded every month from the system and collated in internal files. Collection is part of the team’s normal administrative procedures.

CCL receipts data includes receipts for Carbon Price Floor. The receipts are apportioned between CCL and CPF and these are reported separately in the bulletin. CPF does not have distinct source data and liabilities data are used to estimate the CCL/CPF split.

This data is sense checked and checked against previous months and years for differing trends. Any unexpected trends are thoroughly investigated and explained.

3.4 Data validation

Data validation processes are as follows:

• source data is checked against the previous release for any revisions every release and any revisions are clearly marked

• statistics are sense checked after compilation to ensure there are no mistakes or unexplained outliers

• data may be compared to external or public sources to validate that trends are consistent

3.5 Data compilation

Receipts data for CCL, AGL and LFT are taken from a variety of sources as detailed above. For each tax, the aggregated data is analysed during the data compilation and sense checked to ensure accuracy.

3.6 Adjustment

No significant adjustment takes place within the Environmental Taxes bulletin.

4. Quality Management

4.1 Quality assurance

All official statistics produced by KAI must meet the standards in the Code of Practice for Statistics produced by the UK Statistics Authority and all analysts adhere to best practice as set out in the ‘Quality’ pillar.

Analytical Quality Assurance describes the arrangements and procedures put in place to ensure analytical outputs are error free and fit-for-purpose. It is an essential part of KAI’s way of working as the complexity of our work and the speed at which we are asked to provide advice means there is a risk of error.

Every piece of analysis is unique, and as a result there is no single quality assurance (QA) checklist that contains all the QA tasks needed for every project. Nonetheless, analysts in KAI use a checklist that summarises the key QA tasks, and is used as a starting point for teams when they are considering what QA actions to undertake.

Teams amend and adapt it as they see fit, to take account of the level of risk associated with their analysis, and the different QA tasks that are relevant to the work.

At the start of a project, during the planning stage, analysts and managers make a risk-based decision on what level of QA is required.

Analysts and managers construct a plan for all the QA tasks that will need to be completed, along with documentation on how each of those tasks are to be carried out and turn this list into a QA checklist specific to the project.

Analysts carry out the QA tasks, update the checklist, and pass onto the Senior Responsible Officer for review and eventual sign off.

4.2 Quality assessment

The QA for this project adhered to the framework described in ‘4.1 Quality assurance’ and the specific procedures undertaken were as follows:

Stage 1 – Specifying the question

Up to date documentation was agreed with stakeholders setting out outputs needed and by when; how the outputs will be used; and all the parameters required for the analysis.

Stage 2 – Developing the methodology

Methodology was agreed and developed in collaboration with stakeholders and others with relevant expertise, ensuring it was fit for purpose and would deliver the required outputs.

Stage 3 – Building and populating a model/piece of code

The bulletin was quality assessed as follows:

• analysis was produced using the most appropriate software and in line with good practice guidance

• data inputs were checked to ensure they were fit-for-purpose by reviewing available documentation and, where possible, through direct contact with data suppliers

• QA of the input data was carried out

• the analysis was audited by someone other than the lead analyst – checking code and methodology

Stage 4 – Running and testing the model/code

The bulletin was quality assessed as follows:

• results were compared with those produced in previous years and differences understood and determined to be genuine

• results were determined to be explainable and in line with expectations

Stage 5 – Drafting the final output

The final outputs were quality assessed as follows:

• checks were completed to ensure internal consistency (e.g. totals equal the sum of the components)

• the final outputs were independently proof-read and checked

5. Relevance

5.1 User needs

This analysis is likely to be of interest to users under the following broad headings:

• national government – policy makers and MPs

• regional and local governments

• academia and research bodies

• media

• industry stakeholders

• general public

5.2 User satisfaction

The demand for the Environmental Taxes Bulletin is measured by the number of unique page views which represents the number of visits during which the page was viewed at least once. The latest publication in the year from July 2021 to June 2022 received 672 unique page views.

5.3 Completeness

Report information on the extent to which the necessary statistics are available. Report where requirements based on relevant legislation, regulation and guidelines are not met and provide reasons for this.

It is a legal requirement that all businesses are regulated and submit the relevant returns required. Penalties exist for non-compliance. The statistics contained in this report can therefore be considered as complete.

HMRC report estimates of the tax gap across all taxes and duties annually.

6. Accuracy and reliability

6.1 Overall accuracy

This bulletin is based on administrative data, and accuracy is addressed by eliminating non-sampling errors as much as possible through adherence to the quality assurance framework. The nature of the administrative data used may mean some errors exist in the recorded figures which would impact the accuracy of production estimates.

The potential sources of error include:

• companies entering incorrect information onto return forms

• human or software error when entering the data into systems

• companies not completing their returns by the required date

• mistakes in the programming code used to analyse the data and produce the statistics

6.2 Sampling error

No sampling takes place within the Environmental Taxes bulletin.

6.3 Non-sampling error

Coverage error

The data used to produce these publications is exhaustive, and covers all CCL, CPF, AGL and LFT taxes due under UK jurisdiction. This means that data on receipts refers to all CCL, CPF, AGL and LFT taxes dutied legally. Coverage error is therefore not relevant.

Measurement error

The main sources of measurement error could be categorised as respondent errors and include the following:

• companies may make errors entering their information onto return forms, whether this is done on paper or electronically

• company tax return data is subsequently entered onto HMRC systems either manually or by electronic transmission, which is another point at which data may be altered due to human or software error

Nonresponse error

The Environmental Taxes bulletin features routine administrative data based on receipts and clearances that must be submitted. We do not make any adjustments for missing or late returns data, therefore nonresponse error is not relevant.

Processing error

It is possible that errors exist in the programming code used to analyse the data and produce the statistics. This risk is reduced through developing a good understanding of the code and thoroughly reviewing and testing the programs that are used.

6.4 Data revision

Data revision – policy

The United Kingdom Statistics Authority (UKSA) Code of Practice for Official Statistics requires all producers of Official Statistics to publish transparent guidance on the policy for revisions.

6.5 Data revision

Deferments and late returns can influence the data used for the publications. For that reason, the last 12 months of data at any given time are labelled as ‘provisional’, although revisions tend to be minor. Where there are revisions they are clearly marked as ‘revised’, and information is given as to the reasons and scale of the revisions if appropriate.

Every release of a new publication, previous data is reviewed and any revisions required are made. If revised data was not previously marked as provisional it is clearly highlighted in the statistics with a ‘[revised]’ markup within the statistical tables.

Planned revisions occur with the release of the annual receipts publication. This alignment occurs every March and involves the previous financial year. Receipts are considered provisional until the publication is released.

The United Kingdom Statistics Authority (UKSA) Code of Practice for Official Statistics requires all producers of Official Statistics to publish transparent guidance on the policy for revisions.

6.6 Seasonal adjustment

No seasonal adjustment occurs within the Environmental Taxes bulletin and is therefore not relevant to the publication.

7. Timeliness and punctuality

7.1 Timeliness

The bulletin is published once a year, one month after the end of the reporting period for receipts. For example, the bulletin reporting on Environmental taxes from June 2021 to May 2022 is published at the end of June 2022. The bulletin takes around one week to produce, with the data not being available until after the middle of the month. The remaining time is spent quality assuring the information in the bulletin.

Prior to June 2021, the content of the Environmental Taxes Bulletin was published across 3 separate bulletins:

• Climate Change Levy and Carbon Price Floor Bulletin
• Aggregates Levy Bulletin
• Landfill Tax Bulletin

7.2 Punctuality

In accordance with the Code of Practice for official statistics, the exact date of publication will be given not less than one calendar month before publication on both the Schedule of updates for HMRC’s statistics and the Research and statistics calendar of GOV.UK.

Any delays to the publication date will be announced on the HMRC National Statistics website.

The full publication calendar can be found on both the Schedule of updates for HMRC’s statistics and the Research and statistics calendar of GOV.UK.

The June 2020 release of the Climate Change Levy and Carbon Price Floor Bulletin was cancelled due to completeness issues related to the Coronavirus (COVID-19) pandemic.

8. Coherence and comparability

8.1 Comparability over time

Comparability over time of duty rates and receipts at constant prices is reliant upon the deflator used. HMRC uses the Inflation and price indices series published by the Office for National Statistics (ONS), and values are therefore subject to any biases this series might present.

8.2 Coherence – cross domain

No known issues regarding coherence between domains.

Coherence – sub-annual and annual statistics

No known issues regarding coherence between sub-annual and annual statistics.

Coherence – national accounts

The statistics are coherent with the national accounts framework, but users should note that receipts for CCL, AGL and LFT are reported on a cash basis by HM Revenue and Customs (HMRC), i.e., when cash payments are received, but within some national accounts publications, such as the Office of National Statistics Public Sector Finances publication, revenue for these taxes is published on an accrued basis, i.e., when tax liability was accrued by taxpayers.

8.3 Coherence – internal

No known issues regarding coherence between internal datasets.

9. Accessibility and clarity

9.1 News release

Link all press releases linked to the data over the past year.

9.2 Publication

The data is publicly available within the Environmental Taxes Bulletin and is published at 9:30 am on the pre-announced date of release.

The Environmental Taxes Bulletin commentary is published in Hypertext Markup Language (HTML) format, as generated within internal UK government HTML Markdown software. The Environmental Taxes Bulletin data tables which accompany the commentary are published in Open Document Spreadsheet (ODS) format.

Accompanying the bulletin is a background and references document which includes:

• definitions for Environmental Taxes duties and products

• details on how Environmental Taxes are levied and paid

• methodology for producing Environmental Taxes statistics

• statistical quality information, including HMRC’s rounding policy

• hyperlinks to relevant pages where bulletin users can find more information

There is also an accompanying historic rates document relating to CCL, AGL and LFT.

Both historic duty rates and background and references are published in HTML format.

The Environmental Taxes Bulletin was first published in June 2021 and, following a consultation on the reduction and consolidation of HMRC statistics publications, amalgamated three previous bulletins:

• The Climate Change Levy and Carbon Price Floor Bulletin

• The Aggregates Levy Bulletin

• The Landfill Tax Bulletin

These three individual bulletins were published biannually and a further outcome of the consultation was for the consolidated Environmental Taxes Bulletin to be published annually.

In November 2020, substantial formatting changes were made to these bulletins to ensure alignment with accessibility regulations for digital content from public bodies as legislated within the Public Sector Bodies (Websites and Mobile Applications) (No. 2) Accessibility Regulations 2018. This reformatting formed part of HMRC’s wider accessible documents policy.

Changes made to these bulletins included:

• replacement of Portable Document Format (PDF) files previously used for statistics commentary with HTML documents for the same purpose

• migration of all Environmental Taxes background, references and rates information from Microsoft Excel tables to HTML documents

• migration of data tables from Microsoft Excel to ODS format

• simplification of language used to avoid jargon and clear explanations used to describe all non-decorative features

An accessibility report was first produced to identify required format changes. The overriding aim of this reformat was to improve how perceivable, operable, understandable and robust these bulletins are for all users, in line with the Web Content Accessibility Guidelines (WCAG 2.1) design principles for accessibility.

9.3 Online databases

This analysis is not used in any online databases.

9.4 Micro-data access

Access to this data is not possible in micro-data form, due to HMRC’s responsibilities around maintaining confidentiality of taxpayer information.

9.5 Other

There aren’t any other dissemination formats available for this analysis.

9.6 Documentation on methodology

Background and references to the Environmental Taxes bulletin is publicly available to users within the Environmental Taxes Bulletin.

9.7 Quality documentation

All official statistics produced by KAI, must meet the standards in the Code of Practice for Statistics produced by the UK Statistics Authority and all analysts adhere to best practice as set out in the ‘Quality’ pillar.

Information about quality procedures for this analysis can be found in section 4 of this document.

10. Cost and burden

The annual update to the Environmental Taxes Bulletin takes up to 4 working days in total for the main analyst to complete and receive QA from other analysts, the team leader, and the person signing off the release. The annual cost, therefore, is around 16 days a year (4 days per bulletin completed 4 times a year).

This is the most time consuming bulletin of all those published by the team, as it encompasses the retrieval and aggregation of several data sources, which in some cases can be lengthy procedures. The number of checks to the data is naturally large, although it could be reduced with further scrutiny.

There is no respondent burden since the data is taken from administrative sources which are used by taxpayers to make their usual returns to HMRC.

11. Confidentiality

11.1 Confidentiality – policy

HMRC has a legal duty to maintain the confidentiality of taxpayer information.

Section 18(1) of the Commissioners for Revenue and Customs Act 2005 (CRCA) sets out our duty of confidentiality.

This analysis complies with this requirement.

11.2 Confidentiality – data treatment

There are no special rules for confidentiality or data treatment in these statistics.

Before going live, the statistics is classified as pre-released National Statistics, and is therefore subject to a restricted protective marking when referred to in email correspondence and is subject to the Code of Practice for Official Statistics, which is strictly enforced.