Please see below – I pulled this article form a newspaper to highlight the fact that there will be a number of companies caught out in the coming years. 

Businesses that have gone bust during the recession or operate through franchises could fall foul of controversial new “green tax” legislation.

Any company with a half hourly electricity meter installed at the end of 2008 has to report its electricity meter details to the Government by the end of September under the carbon reduction commitment scheme. If they do not, they face fines of at least £500.

The Department for Energy and Climate Change requires qualifying companies that went bust since 2008 to register – although in a concession it has waived the £2,240 in fees it normally charges heavy energy users to take part in the carbon trading scheme.

Small-scale franchisors are hit by the legislation because they are obliged to collate the energy consumption of all the independent businesses trading under the franchise if their collective consumption exceeds 6,000MW per year or where one of those individual businesses uses a half hourly meter and the total exceeds 3,000MW per year.

The Environment Agency guidance states: “You will need to include emissions from all your franchisees as if they were emissions from your own organisation.”

Lawyers warned that the regulatory burden on small businesses was “disproportionate” to benefits of collating their energy consumption.

Geoffrey Sturgess, a partner, at solicitors Blake Lapthorn, said: “There is in my mind little doubt that the legislative impact of this on franchisors, many of which are small businesses with lots of other small businesses as their franchisees, is disproportionate.

He added: “The new Government has made much of its commitment to repeal unnecessary legislation. It might spend its time more profitably looking at the way in which much business regulation has a scattergun effect and amend it to ensure that it is both proportionate and targeted appropriately.”

DECC had been warned by the British Franchise Association that smaller businesses would be caught by the new regulations but this advice was rejected to make sure that larger franchisors like McDonald’s were included.

The scheme has three tiers. Around 4,000 companies consuming more than 6,000MW of electricity a year have to register and pay a “pollution tax” of up to £100,000 a year for the amount they use. So far around 1,300 have registered.

Those companies with a half hour meter that consume more than 3,000MW a year have to register their energy consumption and details but are not charged.

Smaller businesses that still have a half hour meter installed but use less than 3,000MW a year have to register their details. Failure to provide this information could incur a £500 fine.

Delvin Lane, head of energy 360 services at British Gas Business, said awareness of the reporting obligations among smaller businesses was limited.

“The lower down the energy spend you go there’s absolutely no awareness. It’s such a small part of their business at that level – it is just not core. So they have not given it any management attention.”

These businesses are likely to include small chains of hotels, restaurants and dry cleaners, often operating under franchise brands, as well as office or industrial unit landlords, small manufacturers and food processors, like bakeries.

DECC defended the inclusion of smaller businesses within the CRC scheme and the administrative burden it imposed.

“Analysis indicates that it should only take no more than three hours for information declarers to collate information on their half hourly meters and their energy consumption,” a spokesman said.

“It is estimated that making an information disclosure on the CRC registry will only take approximately 30 minutes.”

She added that companies that have ceased trading since 2008 would have to register for the scheme.

“The reason for requiring such organisations to register is one of data integrity - to ensure that all [meters] settled on the market have been accounted for; to enable the Environment Agency to audit effectively and thereby ensure that all organisation who should participate fully in the scheme have registered.”

The Environment Agency has said that as of Monday 16 August 1,398 of the 4,000 organisations that will take part in the trading scheme had registered, while 4,965 of the 15,000 information providers had registered.

With all that said there are ways in which small and large organisations can benefit from this new ‘TAX’ but you will need to get your house in order.

Call to discuss if you need advice or you want to find out what we can do.