Legalize / United Kingdom / Statutory-Instrument

The Green Gas Support Scheme Regulations 2021

Type Statutory-Instrument

Publication 2021-11-29

Last updated 2025-11-01

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

PDF Download

articles Not indexed

Reform history JSON API

(4) Where a participant is required to repay an amount under paragraph (3)(b) and fails to make payment in full by the date specified by the Authority, the Authority may recover any outstanding sum as a civil debt.

(5) For the purposes of this regulation—

“biogas yield” means the energy content of any biogas produced by anaerobic digestion which is an ingredient of that biomethane, and

“payment year” means any 12 month period beginning with the tariff start date, or with the anniversary of the tariff start date.

PART 6 — Compliance and enforcement: participants

Power to temporarily withhold periodic support payments to investigate alleged non-compliance

29

(1) Where the Authority has reasonable grounds to suspect that a participant—

(a) has failed or is failing to comply with an ongoing participant obligation, or

(b) has been registered as a result of the provision of information which was incorrect in a material particular,

and the Authority requires time to investigate, it may withhold all or part of that participant’s periodic support payments pending the outcome of that investigation.

(2) Within 21 days of making a decision under paragraph (1) to withhold periodic support payments, the Authority must give a notice to the participant specifying—

(a) the respect in which the Authority suspects the participant has failed or is failing to comply with an ongoing participant obligation, or a description of the information which the Authority suspects to be incorrect and upon which the registration was based,

(b) the reason why periodic support payments are being withheld,

(d) the next steps in the investigation, and

(e) details of the participant’s right of review under regulation 62.

(3) The Authority’s investigation must be commenced and completed as soon as is reasonably practicable.

(4) The Authority may—

(a) request such information from the participant as it reasonably requires to enable it to carry out its investigation, and

(b) withhold a participant’s periodic support payments for a maximum period of six months beginning with the date specified in the notice in accordance with paragraph (2)(c).

(5) The Authority must review its decision to withhold a participant’s periodic support payments every 30 days after the date of the notice required by paragraph (2).

(6) Following a review pursuant to paragraph (5), the Authority must give a notice to the participant providing an update on—

(a) the progress of any investigation, and

(b) whether the Authority intends to continue to withhold periodic support payments.

(7) For the purposes of calculating the period specified in paragraph (4)(b), no account is to be taken of any period attributable to the participant’s delay in providing the information requested by the Authority under paragraph (4)(a).

(8) For the purposes of paragraph (7), a participant is not to be treated as having delayed in providing information if that participant provides the information within two weeks of a request from the Authority.

(9) Subject to paragraph (11), immediately upon conclusion of its investigation under this regulation, the Authority must give a notice to the participant specifying—

(a) the outcome of the investigation,

(b) the action the Authority proposes to take under this Part, and

(10) Subject to paragraph (11), where the Authority concludes that there has been no breach of an ongoing participant obligation or no provision of incorrect information, it must resume payment of periodic support payments and pay to the participant any periodic support payments withheld during the course of its investigation.

(11) Within the period specified in paragraph (4)(b), the Authority must either resume payment of periodic support payments or give a notice to the participant under one or more of the following—

(a) regulation 30 (power to withhold periodic support payments: further provisions),

(b) regulation 31 (power to reduce a participant’s periodic support payments),

(d) regulation 33 (power to correct the level of tariff being paid to a participant),

(e) regulation 34 (overpayment notices and offsetting).

Power to withhold periodic support payments: further provisions

30

(1) Where the Authority—

(a) is satisfied that a participant—

(i) has failed or is failing to comply with an ongoing participant obligation, or

(ii) has been registered as a result of the provision of information which was incorrect in a material particular, or

(b) has reasonable grounds to suspect the matters in sub-paragraph (a)(i) or (ii), and is unable to conclude its investigation under regulation 29 within six months of the date specified in the notice in accordance with paragraph (2)(c) of that regulation as a result of the participant’s delay in providing any information reasonably requested by it,

it may withhold all or part of that participant’s periodic support payments.

(2) For the purposes of paragraph (1)(a)(i) and regulations 31(1) and 32(1)(a), the Authority is satisfied that a participant has failed or is failing to comply with a requirement referred to in—

(a) regulation 9(13) (ongoing participant obligations in relation to digestate), or

(b) regulation 10(1)(j) (ongoing participant obligations in relation to planning permission, environmental permits, etc.),

if it receives notification that the participant is in breach of that requirement from a court, a tribunal, or any other person responsible for enforcing the requirement.

(3) Within 21 days of making a decision under paragraph (1) to withhold periodic support payments, the Authority must give a notice to the participant specifying—

(a) where there has been a failure to comply with an ongoing participant obligation, the respect in which the Authority is satisfied that the participant has failed or is failing to comply,

(b) where the participant was registered as a participant as a result of the provision of incorrect information, details of the respect in which the information was incorrect,

(c) where paragraph (1)(b) applies, details of the respect in which the participant delayed in providing information requested by the Authority,

(d) the amount of periodic support payments that the Authority intends to withhold in respect of each quarter,

(e) the date from which periodic support payments are being withheld,

(f) where applicable, the steps that the participant must take to satisfy the Authority that it is complying with the ongoing participant obligation,

(g) where applicable, the steps that the participant must take to satisfy the Authority that, notwithstanding the provision of incorrect information, the participant should continue to be registered,

(h) where applicable, the information the participant must provide to the Authority,

(i) the date by which the steps referred to in sub-paragraph (f) or (g) must be completed or the information mentioned in sub-paragraph (h) must be provided,

(j) the consequences of the participant failing to take the steps mentioned in sub-paragraph (f) or (g), or failing to provide the information mentioned in sub-paragraph (h), by the date specified, and

(k) details of the participant’s right of review under regulation 62.

(4) The Authority may extend the time specified under paragraph (3)(i) where it is satisfied that it is reasonable to do so.

(5) Where the Authority is satisfied that the participant has—

(a) taken the steps specified in the notice in accordance with paragraph (3)(f) or (g), whether on the basis of information provided by the participantor, in the case of a failure to comply with a requirement referred to in regulation 9(13) or 10(1)(j), on the basis of information provided by a person responsible for enforcing that requirement, or

(b) provided the information specified in the notice in accordance with paragraph (3)(h),

as applicable, within the time specified, it must resume payment of the periodic support payments.

(6) If, within six months of receipt by the participant of a notice sent under paragraph (3), the Authority is satisfied that the participant has taken the steps specified in that notice, the Authority may pay, within 28 days of being so satisfied, all periodic support payments withheld under this regulation.

Power to reduce a participant’s periodic support payments

31

(1) Where the Authority is satisfied that there has been a material or repeated failure by a participant to comply with an ongoing participant obligation during any quarter and the periodic support payment for that quarter has not been paid, the Authority may take one or more of the following actions—

(a) reduce the participant’s periodic support payment by an amount which corresponds to the proportion of that quarter during which the participant failed so to comply,

(b) reduce a participant’s periodic support payment for that quarter or for the quarter immediately following.

(2) Within 21 days of making a decision under paragraph (1) to reduce a periodic support payment, the Authority must give a notice to the participant specifying, as applicable—

(a) the respect in which the participant has failed to comply with an ongoing participant obligation,

(b) the period in respect of which any periodic support payment is to be reduced,

(d) details of the participant’s right of review under regulation 62.

(3) In reducing a periodic support payment in accordance with paragraph (1)(b), the Authority may determine the level of the reduction (taking into consideration all factors which it considers relevant) up to a maximum reduction of 10% of the periodic support payment in question.

Revocation of registration

32

(1) Where the Authority is satisfied—

(a) that there has been a material or repeated failure by a participant to comply with an ongoing participant obligation,

(b) a participant has been registered as a result of the provision of information which was incorrect in a material particular, or

it may take either of the actions in paragraph (2).

(2) The actions in this paragraph are that the Authority may—

(a) revoke that participant’s registration, or

(b) in the case of a producer of biomethane who is registered as a participant more than once, revoke all of their registrations.

(3) Before revoking a registration under this regulation, the Authority must give a notice to the participant specifying—

(a) the reason for the intended revocation including details of the respect in which the participant has failed to comply or the information was incorrect,

(b) an explanation of the effect of the revocation, and

(4) Where a participant’s registration has been revoked, the Authority—

(a) must update the central register accordingly, and

(b) may refuse to register that person or a connected person as a participant at any future date.

Power to correct the level of tariff being paid to a participant

33

(1) Where periodic support payments are being paid to a participant in accordance with a guaranteed tariff, if the Authority is satisfied that the information upon which the tariff guarantee was based was incorrect in a material particular it may—

(a) revoke that participant’s registration, or

(b) reduce the level of periodic support payments to the level which would have applied had the tariff guarantee not been granted.

(2) Before revoking a registration or reducing the level of periodic support payments under this regulation, the Authority must give a notice to the participant specifying, as applicable—

(a) the reason for the intended revocation or reduction including details of the respect in which the information upon which the tariff guarantee was based was incorrect,

(b) an explanation of the effect of the revocation,

(d) the basis on which those payments are calculated, and

(e) details of the participant’s right of review under regulation 62.

Overpayment notices and offsetting

34

(1) Where the Authority is satisfied that a participant has received periodic support payments which—

(a) exceed that participant’s entitlement,

(b) were paid whilst there was a failure by that person to comply with an ongoing participant obligation, or following such a failure, or

it may take one of the actions set out in paragraph (2).

(2) The actions in this paragraph are that the Authority may—

(a) require a participant who has received periodic support payments to which paragraph (1) applies, to repay a specified sum in relation to some or all of those payments, or

(b) offset a specified sum in relation to some or all of those payments against future periodic support payments.

(3) Before taking either of the actions set out in paragraph (2), the Authority must give a notice to the participant specifying—

(a) the sum it is seeking to recover,

(b) the basis on which that sum has been calculated,

(d) where applicable, the date by which the sum must be repaid,

(e) where applicable, the amount which will be offset in each quarter and the time it will take for the sum to be recovered, and

(f) details of the participant’s right of review under regulation 62.

(4) Where a participant is required to repay a specified sum under this regulation and fails to make payment in full by the date specified under paragraph (3)(d), the Authority may recover any outstanding sum as a civil debt.

Revocation of sanctions

35

(1) The Authority may at any time revoke a sanction imposed in accordance with any of regulations 29 to 34 if it is satisfied that—

(a) there was an error involved in the original imposition of the sanction, or

(b) it is just and equitable in the particular circumstances of the case to do so.

(2) Within 21 days of a decision to revoke a sanction, the Authority must give a notice to the participant specifying—

(a) the sanction which has been revoked,

(b) the reason for the revocation,

(c) what action if any the Authority proposes to take in relation to any loss reasonably incurred by the participant as a result of the imposition of the sanction including the time within which any action will be taken, and

(d) details of someone within the Authority whom the participant may contact if they are not satisfied with the proposals made by the Authority under sub-paragraph (c).

Power to inspect equipment used to produce biomethane

36

(1) The Authority or its authorised agent may request access without notice at any reasonable hour to inspect equipment used to produce biomethane and its associated infrastructure to do any one or more of the following—

(a) verify that the participant is complying with all applicable ongoing participant obligations,

(b) verify meter readings,

(d) take photographs, measurements or video or audio recordings, and

(e) ensure that there is no other contravention of these Regulations.

(2) Within 21 days of a request made under paragraph (1) being, in the opinion of the Authority, unreasonably refused the Authority must give a notice to the participant specifying—

(a) the reason why the Authority considers the refusal to be unreasonable,

(b) the consequences of the refusal, including potential sanctions for failing to comply with the ongoing participant obligation imposed by regulation 10(1)(f) (ongoing participant obligation to allow access), and

Application of this Part in relation to former participant

37

Where a producer of biomethane (“P”) ceases to be a participant by virtue of the operation of regulation 16 (withdrawal of participant), or regulation 32 (revocation of registration), this Part applies to P as if P were still a participant, with the following modifications—

(a) regulation 32 does not apply,

(b) regulation 33 does not apply to the extent that it provides for the Authority to revoke a participant’s registration,

(c) regulation 34 does not apply to the extent that it provides for the Authority to offset a specified sum against future periodic support payments,

(d) regulation 36 applies, but as if—

(i) in paragraph (1)(a), for the words “is complying” there were substituted “had complied”, and

(ii) in paragraph (1)(e), for the word “is” there were substituted “was”.

PART 7 — The levy

CHAPTER 1 — Introductory

Scheme suppliers, provisionally exempt suppliers, and exempt suppliers

38

(1) Subject to the following paragraphs, a licensed gas supplier (“GS”) who is a fossil fuel supplier[^f00030] is ascheme supplier.

(2) GS is not a scheme supplier in relation to the scheme year beginning with 1st April 2022, or a subsequent scheme year, where the Authority determines in accordance with paragraph (10) that at least 95% of the gas supplied by GS in the scheme year was certified biomethane and that they are an exempt supplier in relation to that scheme year.

(3) Where GS considers it is likely that they will be an exempt supplier in relation to a scheme year (the “relevant scheme year”), GS must—

(a) notify the Authority of that fact—

(i) in relation to the scheme year beginning with 1st April 2022, by the tenth working day after the day on which these Regulations come into force,

(ii) in relation to the scheme year beginning with 1st April 2023 and any subsequent scheme year, by the relevant date specified in the scheme schedule,

(b) provide the Authority with such other information as the Authority may request in support of that notification, and

(c) provide written confirmation from a responsible officer of GS that the information provided in accordance with sub-paragraphs (a) and (b) is correct.

(4) Where the Authority receives a notification referred to in paragraph (3)(a)—

(a) it may instruct, or it may require GS to instruct, a person who is not a connected person in relation to GS to consider the information provided in accordance with paragraph (3)(a) and (b) and prepare a report (an “assurance report”),

(b) GS must provide to the Authority a copy of any assurance report prepared on their instruction, and the Authority must provide to GS a copy of any assurance report prepared on its instruction,

(c) having considered the information provided in accordance with paragraph (3)(a) and (b), and any assurance report prepared in accordance with sub-paragraph (a), it must determine whether it is likely that GS will be an exempt supplier in relation to the relevant scheme year, and notify GS of that determination—

(i) in relation to the scheme year beginning with 1st April 2022, by 1st March 2022,

(ii) in relation to the scheme year beginning with 1st April 2023 and subsequent scheme years, by 31st October preceding the start of the relevant scheme year.

(5) An assurance report must comply with such requirements as the Authority may specify.

(6) Where the Authority determines it is likely that GS will be an exempt supplier in relation to the relevant scheme year, GS is a provisionally exempt supplier in relation to that scheme year, and—

(a) subject to paragraph (12), GS is not required to comply with the requirements on scheme suppliers set out in these Regulations, apart from this regulation and regulations 46 to 48 (additional obligations on scheme suppliers) in relation to the relevant scheme year,

(b) the Authority may not commence or continue compliance or enforcement action under Part 10 in relation to any breach of these Regulations by GS, apart from this regulation and regulations 46 to 48, which occurred in relation to the relevant scheme year,

(d) the notification required by paragraph (4)(c) must state that GS—

(i) is a provisionally exempt supplier in relation to the relevant scheme year, and

(ii) is not required to comply with the requirements on scheme suppliers set out in these Regulations in relation to the relevant scheme year, apart from this regulation and regulations 46 to 48.

(7) Where the Authority determines it is not likely that GS will be an exempt supplier in relation to the relevant scheme year, the notification required by paragraph (4)(c) must state that GS is not a provisionally exempt supplier in relation to the relevant scheme year.

(8) Where at least 95% of the gas supplied by GS in a scheme year was certified biomethane GS must by 1st July following the end of that scheme year—

(a) notify the Authority of that fact,

(b) provide the Authority with evidence, supplied under an approved certification scheme, that at least 95% of the gas supplied by them in that scheme year was certified biomethane, and

(9) Where GS was a provisionally exempt supplier in relation to a scheme year and less than 95% of the gas supplied by them in that scheme year was certified biomethane GS must by 1st July following the end of that scheme year—

(a) notify the Authority of that fact, and

(b) provide the Authority with such information in relation to the gas supplied by them in that scheme year as the Authority may request.

(10) Where the Authority receives a notification and the information required by paragraph (8)—

(a) it must determine, on the basis of that information, whether at least 95% of the gas supplied by GS in the scheme year was certified biomethane,

(b) it must notify GS of that determination by the relevant date specified in the scheme schedule,

(c) where the Authority determines that at least 95% of the gas supplied by GS in the scheme year was certified biomethane—

(i) GS is exempt from the requirements of these Regulations (an “exempt supplier”) in relation to that scheme year, and

(ii) the notification required by sub-paragraph (b) must state that GS is an exempt supplier in relation to that scheme year,

(d) where the Authority determines that less than 95% of the gas supplied by GS in the scheme year was certified biomethane, the notification required by sub-paragraph (b) must state that GS is not an exempt supplier in relation to the scheme year.

(11) Where GS was a provisionally exempt supplier in relation to a scheme year and—

(a) provides a notification required by paragraph (9), and

(b) does not provide a notification and information in accordance with paragraph (8),

in relation to that scheme year, the Authority must notify GS that they are not an exempt supplier in relation to that scheme year by the relevant date specified in the scheme schedule.

(12) Where GS—

(a) was a provisionally exempt supplier in relation to a scheme year, and

(b) is notified in accordance with paragraph (10)(b) or (11) that they are not an exempt supplier in relation to that scheme year,

GS is not required to comply with the requirements on scheme suppliers set out in this Part, apart from this regulation, in relation to that scheme year.

(13) Where GS—

(a) was not a provisionally exempt supplier in relation to a scheme year, and

(b) is notified in accordance with paragraph (10)(b) that they are an exempt supplier in relation to that scheme year,

GS is treated, from the date of that notification, as an exempt supplier in relation to that scheme year.

(14) The Secretary of State must—

(a) approve one or more certification schemes for the purposes of these Regulations,

(b) publish the name of any certification scheme which is approved, and the date from which it is approved, and

(c) where a certification scheme ceases to be approved, publish that fact together with the date on which the certification scheme ceased to be approved.

(15) For the purposes of this regulation—

(a) “approved certification scheme” means a certification scheme which is approved by the Secretary of State in accordance with paragraph (14)(a),

(b) “certification scheme” means a scheme for the purpose of certifying biomethane supply,

(i) injected in that scheme year, and

(ii) the supply of which is certified under an approved certification scheme,

(d) “company” includes any body corporate,

(e) “gas supply data”, in relation to a licensed gas supplier, means the volume of gas supplied by them on any given day,

(f) “responsible officer”, in relation to a licensed gas supplier, means a person who is—

(i) a director of the licensed gas supplier within the meaning of section 250 of the Companies Act 2006[^f00031], or

(ii) where there is no person falling within paragraph (i) in relation to the licensed gas supplier, a person exercising management control in relation to the licensed gas supplier.

Calculation and publication of the levy rate

39

(1) The Secretary of State must calculate the levy rate for each scheme year, expressed in pence per meter point per day (“the levy rate”), as follows—

where—

(a) A is the adjustment factor, as determined by the Secretary of State, used to predict the likely change in the number of meter points over the next scheme year,

(b) D is the number of days in that scheme year,

where—

(i) SBy is the projected scheme expenditure for that scheme year, as determined by the Secretary of State,

(ii) AAy is the Authority’s forecasted administrative costs for that scheme year,

(iii) TYy-2 is the difference between the forecasted year end surplus and the actual year end surplus for the scheme year before the previous scheme year (“Y-2”) but excluding any year end deficit for Y-2 (“the true-up”),

(iv) TDy-2 is any year end deficit for Y-2,

(v) QLy+1 is the quarterly lag uplift in relation to the following scheme year (“Y+1”), being 25% of the difference between the projected scheme expenditure for Y+1 and the previous scheme year,

(vi) Hy is the headroom figure for that scheme year, published in accordance with paragraph (4)(g),

(vii) Iy-2 is the sum of interest—

(aa) accrued on money held in the bank account referred to in regulation 40(5),

(bb) paid in accordance with regulation 54(1)(a)(i), (ii) or (iii),

(cc) payable in any scheme year in accordance with regulation 54(1)(a)(i), (ii) or (iii) and recovered by the Authority under regulation 58(g),

in Y-2,

(viii) SDy-1 is the forecasted year end surplus from the previous scheme year, and if no surplus is forecasted, the value for SDy-1 is 0 (zero),

(ix) the variables in paragraphs (i) to (viii) are expressed in pence,

(x) in the calculation for the first scheme year, the value for QLy+1 is 0 (zero),

(xi) in the calculation for the first scheme year, and the calculation for the scheme year beginning with 1st April 2022, the value for each of TYy-2, TDy-2, and SDy-1, is 0 (zero),

(xii) in the calculation for the first scheme year, the value for SBy is the projected scheme expenditure in relation to relevant producers (within the meaning given in regulation 17) for both the first scheme year and the first quarter of the scheme year beginning with 1st April 2022,

(xiii) “year end surplus” and “year end deficit” mean the amount by which the sum of all amounts received by the Authority under this Part and Parts 9 and 10 excluding—

(aa) amounts received under regulation 42 (levy credit payments),

(bb) interest accrued on money held in the bank account referred to in regulation 42(4) (interest on levy credit payments),

(cc) amounts received under regulation 57 (penalty notices),

(dd) amounts recovered under regulation 58(f) (recovery of unpaid financial penalties as a civil debt), and

(ee) in the case of a forecast year end surplus or year end deficit, interest accrued on money held in the bank account referred to in regulation 40(5) (interest on quarterly levy payments),

exceeds, or is exceeded by (as the case may be), the sum of all amounts expended by the Authority under these Regulations in relation to that scheme year,

provided that LS may not exceed the maximum levy amount for that scheme year determined and published under paragraph (6),

(d) M—

(i) in relation to the first scheme year, is the total number of meter points in the market on 31st May 2021,

(ii) in relation to the scheme year beginning with 1st April 2022, is the total number of meter points in the market on 31st May 2021, but excluding any meter points served by a scheme supplier where the Secretary of State determines it is likely that at least 95% of the gas supplied by them in the scheme year beginning with 1st April 2022 will be certified biomethane, and

(iii) in relation to the scheme year beginning with 1st April 2023 and each subsequent scheme year, is the total number of meter points in the market on 31st July preceding the start of that scheme year or such later date as the Secretary of State may determine, but excluding any meter points served by provisionally exempt suppliers in that scheme year.

(2) The Secretary of State must publish the levy rate—

(a) for the first scheme year, by 30th November 2021,

(b) for the scheme year beginning with 1st April 2022, by 30th November 2021,

(c) for the scheme year beginning with 1st April 2023 and each subsequent scheme year, by 31st December in the preceding scheme year.

(3) The Secretary of State may review the levy rate—

(a) for the first scheme year, and

(b) for the scheme year beginning with 1st April 2022,

and, may, as a result of such a review, increase or decrease the levy rate provided that such increase or decrease must be published by the Secretary of State by 1st March 2022.

(4) Subject to paragraph (5), the Secretary of State must publish the following, in relation to the first scheme year and the scheme year beginning with 1st April 2022, by 30th November 2021, and in relation to the scheme year beginning with 1st April 2023 and each subsequent scheme year, by 31st December in the preceding scheme year—

(a) the adjustment factor referred to in paragraph (1)(a),

(b) the projected scheme expenditure referred to in paragraph (1)(c)(i),

(d) the Authority’s forecasted administrative costs, including its estimated administrative costs of carrying out a mutualisation process,

(e) the true-up for the scheme year before the previous scheme year (“Y-2”), including any year end deficit for Y-2,

(f) the quarterly lag uplift, being 25% of the difference between the projected scheme expenditure for that scheme year and the previous scheme year,

(g) the amount which the Secretary of State determines is necessary to mitigate against uncertainties or unexpected events that would result in the funds available to the Authority for the purposes of the Scheme for that scheme year being less than the amount required by the Authority to make periodic support payments in relation to that scheme year (“the headroom figure”),

and where any value so published is increased or decreased as a result of a review carried out in accordance with paragraph (3), must publish the revised value by 1st March 2022.

(5) The value of the following is 0 (zero)—

(a) the forecasted year end surplus from the previous scheme year, in relation to the first scheme year, and the scheme year beginning with 1st April 2022, and

(b) the true-up for the scheme year before the previous scheme year, in relation to the first scheme year, and the scheme years beginning with 1st April 2022 and 2023.

(6) The Secretary of State—

(a) must, before 30th November 2021, determine and publish the maximum amount that can be collected under this Part in any one scheme year (“the maximum levy amount”), expressed in pounds (£) and calculated as follows—

where—

(i) SB is the projected scheme expenditure for the scheme year beginning with 1st April 2028,

(ii) AA is the Authority’s forecasted administrative costs for that scheme year,

(iii) H is the forecasted headroom figure for that scheme year,

(iv) QLy+1 is the quarterly lag uplift, within the meaning given in paragraph (4)(f), in relation to the scheme year beginning with 1st April 2029,

(b) may review the maximum levy amount at any time,

(c) may, as a result of such a review, increase or decrease the maximum levy amount, provided that such increase or decrease—

(i) may only take effect at the start of a scheme year, and

(ii) must be published by the Secretary of State as soon as reasonably practicable.

(6A) Where the Secretary of State reviews the maximum levy amount in accordance with paragraph (6)(b), the Secretary of State must calculate the new maximum levy amount in accordance with the formula set out in paragraph (6)(a) subject to the following modifications—

(a) SB is the projected scheme expenditure for the scheme year with the largest projected scheme expenditure,

(b) QLy+1 is the quarterly lag uplift, within the meaning given in paragraph (4)(f), in relation to the scheme year following that scheme year.

(7) The Authority must provide to the Secretary of State, in such manner and form and by such date as the Secretary of State may request, such information as the Authority may hold and the Secretary of State may require for the purpose of calculating the levy rate and the maximum levy amount in accordance with this regulation.

(8) In this regulation references to the Authority’s administrative costs are references to the costs incurred by the Authority in connection with the performance of its functions under these Regulations.

CHAPTER 2 — Quarterly levy payments and levy credit payments

Calculation and notification of quarterly levy payments

40

(1) The Authority must calculate the quarterly levy payment payable by a scheme supplier (the “quarterly levy payment”), in relation to each quarter of the scheme year beginning with 1st April 2022 and subsequent scheme years, as follows—

where—

(a) LR is the levy rate for the scheme year in which the previous quarter fell,

(b) M—

(i) in relation to the quarter beginning with 1st April 2022, is the sum of the meter point data for that scheme supplier for each day of the period beginning with 30th November 2021 and ending with 31st March 2022, as notified or determined under regulation 48,

(ii) in relation to the quarter beginning with 1st July 2022 and subsequent quarters, is the sum of the meter point data for that scheme supplier for each day of the previous quarter, as notified or determined under regulation 48.

(2) The Authority must notify a scheme supplier, by the relevant dates specified in the scheme schedule, of the quarterly levy payments payable by that supplier.

(3) The notification referred to in paragraph (2) must—

(a) specify—

(i) the amount of the quarterly levy payment payable by the supplier,

(ii) the date by which the amount must be paid, being a date not less than 14 days after the date of the notification, and

(iii) details of how the payment must be made, and

(b) include information about the matters mentioned in—

(i) regulation 54 (interest on late payments), and

(ii) regulation 55 (draw down of credit cover).

(4) A scheme supplier must pay quarterly levy payments to the Authority in accordance with any notification referred to in paragraph (2).

(5) Amounts paid to the Authority under this regulation must be paid into a bank account with the Authority as the beneficiary.

Calculation of credit cover requirement

41

(1) Subject to paragraph (2), the Authority must calculate the credit cover requirement in relation to a scheme supplier, for each quarter of the scheme year beginning with 1st April 2022 and subsequent scheme years, as follows—

where—

(a) LR is the levy rate for the scheme year in which the previous quarter fell,

(b) M—

(i) in relation to the quarter beginning with 1st April 2022, is the sum of the meter point data for that supplier for each day of the period beginning with 31st August 2021 and ending with 31st December 2021, as notified or determined under regulation 48,

(ii) in relation to the quarter beginning with 1st July 2022 and subsequent quarters, is the sum of the meter point data for that supplier for each day of the quarter beginning six months before the start of that quarter, as notified or determined under regulation 48.

(2) Where a licensed gas supplier becomes a scheme supplier on or after 1st April 2022—

(a) the Authority is not required to calculate the credit cover requirement in relation to that supplier for the quarter in which they become a scheme supplier (“the first quarter”), and

(b) the Authority must calculate the credit cover requirement in relation to that supplier, for the quarter (the “second quarter”) following the first quarter and the quarter (the “third quarter”) following the second quarter, in accordance with paragraph (1) but with the modification that “M” is calculated as follows—

where—

(i) AM is the sum of the meter point data for that supplier which is available for the first quarter,

(ii) DQ is—

(aa) in respect of the credit cover requirement for the second quarter, the number of days remaining in the first quarter from and including the date on which the supplier becomes a scheme supplier; or

(bb) in respect of the credit cover requirement for the third quarter, the number of days in the first quarter.

(iii) DA is the number of days in the first quarter for which meter point data for that supplier is available.

Levy credit payments

42

(1) In relation to the scheme year beginning with 1st April 2022 and subsequent scheme years, the Authority must notify a scheme supplier of that scheme supplier’s credit cover requirement for each quarter—

(a) no later than 21 days before the start of that quarter, or

(b) where regulation 41(2)(b) or paragraph (3A) applies, as soon as reasonably practicable.

(2) Where a scheme supplier’s credit cover requirement for a quarter exceeds their existing credit cover, or where the scheme supplier has no existing credit cover, the notification referred to in paragraph (1) must—

(a) specify—

(i) the amount (the “deficit amount”) by which the scheme supplier’s credit cover requirement for the quarter exceeds their existing credit cover,

(ii) the date by which the scheme supplier must pay the deficit amount to the Authority, being a date not less than 14 days after the date on which the notification referred to in paragraph (1) is given, and no later than seven days before the start of that quarter, and

(iii) details of how the payment (the “levy credit payment”) must be made, and

(b) include information about the matters mentioned in—

(i) regulation 43 (letters of credit), and

(ii) regulation 55 (draw down of credit cover).

(3) Subject to regulation 43(1) and (2), a scheme supplier—

(a) must pay any levy credit payment to the Authority in accordance with the notification referred to in paragraph (1),

(b) where—

(i) they have provided an acceptable letter of credit in respect of all or part of their credit cover requirement for a quarter, and

(ii) that letter of credit ceases to constitute an acceptable letter of credit,

must, within 14 days of the letter of credit ceasing to constitute an acceptable letter of credit, pay such amount to the Authority as is necessary so as to ensure that their existing credit cover for that quarter is no less than their credit cover requirement for that quarter,

(c) where the amount of their existing credit cover is reduced as a result of a draw down to pay the whole or any part of a mutualisation payment in accordance with regulation 55 must, within 14 days of the date on which their existing credit cover is so reduced, pay such amount to the Authority as is necessary to ensure that their existing credit cover for the quarter in which the draw down took place is no less than their credit cover requirement for that quarter.

(3A) The Authority must give a scheme supplier a new notification under paragraph (1) with an updated deficit amount where—

(a) the Authority has previously given a notification to the supplier under paragraph (1) notifying them of their credit cover requirement for a quarter,

(b) before the start of that quarter the supplier’s existing credit cover is reduced as a result of a draw down to pay the whole or any part of a mutualisation payment in accordance with regulation 55, and

(i) the deficit amount specified in the notification is no longer sufficient to ensure that the supplier’s credit cover for that quarter covers their credit cover requirement, or

(ii) the notification does not specify a deficit amount but the supplier’s existing credit cover is no longer sufficient to cover their credit cover requirement for that quarter.

(4) Amounts paid to the Authority under this regulation must be paid into a bank account with the Authority as the beneficiary.

(5) Where a scheme supplier’s existing credit cover exceeds their credit cover requirement, the notification referred to in paragraph (1) must—

(a) specify the amount (“the excess amount”) by which the scheme supplier’s existing credit cover exceeds their credit cover requirement, and

(b) where any part of the scheme supplier’s existing credit cover has been paid to the Authority and the excess amount would not be a de minimis amount if payable under regulation 45(2)(a), include information about the matters mentioned in regulation 45 (repayment of levy credit payments).

(5A) Paragraph (5) does not apply where regulation 43A(2)(b) applies in relation to a scheme supplier’s credit cover requirement and any excess amount would be a de minimis amount if payable under regulation 45(2)(a).

(6) For the purposes of this regulation, “existing credit cover”, in relation to a scheme supplier, means the total amount that supplier has—

(a) paid to the Authority in accordance with this regulation, and which continues to be held by the Authority, and

(b) provided to the Authority in the form of a letter of credit in accordance with regulation 43, and which continues to be an acceptable letter of credit.

Letters of credit

43

(1) A scheme supplier may provide an acceptable letter of credit in respect of all or part of their credit cover requirement.

(2) Where a scheme supplier—

(a) provides an acceptable letter of credit by the date specified in the notice referred to in regulation 42(1), or

(b) provides an acceptable letter of credit in the circumstances described in regulation 42(3)(b) or (c),

the amount the scheme supplier must pay to the Authority in relation to their credit cover requirement under regulation 42(3)(a), (b) or (c) (as applicable) is reduced by the amount specified in the letter of credit whilst it constitutes an acceptable letter of credit.

(3) A letter of credit is acceptable where it is—

(a) issued by a person who holds a required credit rating,

(b) valid for at least the quarter to which it relates and the four weeks immediately following the end of that quarter,

(d) issued in such form as the Authority may specify.

(4) Where a scheme supplier has provided the Authority with a letter of credit issued by a person who ceases to hold a required credit rating, that letter of credit ceases to constitute an acceptable letter of credit from the 14th day after the day on which that person ceases to hold that rating.

(5) Subject to paragraph (7), a person holds a required credit rating if that person has been assessed by—

(a) Fitch Ratings as having a short term debt rating of “F1” or better,

(b) Moody’s as having—

(i) a short term debt rating of “P-1”, or

(ii) a long term debt rating of “A3” or better, or

(6) For the purposes of paragraph (5)—

(a) “Fitch Ratings” means Fitch Ratings Limited (registered company number 01316230),

(b) “Moody’s” means the corporation known as Moody’s Investors Service Inc. incorporated in the US State of Delaware with the file number 0577904,

(c) “Standard and Poor’s” means the corporation known as Standard & Poor’s Financial Services LLC. incorporated in the US State of Delaware with the file number 4621989.

(7) The Authority may at any time give a notice to scheme suppliers specifying such alternative required credit rating as it considers appropriate, and that notice remains in force until such time as it is withdrawn by the Authority.

CHAPTER 3 — Payments to scheme suppliers

Distribution of interest on levy credit payments

44

(1) Subject to paragraph (2), in March of each scheme year beginning with March 2023, the Authority must pay to a scheme supplier any interest that has accrued on levy credit payments paid by them whilst in the bank account referred to in regulation 42(4).

(2) The Authority is not required to pay to a scheme supplier all or part of the interest described in paragraph (1) unless it is satisfied that the scheme supplier is not in breach of—

(a) regulation 40 (requirement to pay quarterly levy payments),

(b) regulation 42 (requirement to pay levy credit payments),

(d) regulation 56 (requirement to make mutualisation payments).

Repayment of levy credit payments

45

(1) This regulation applies where a scheme supplier receives a notification referred to in regulation 42(5) (that the supplier’s credit cover requirement is less than their existing credit cover).

(2) Subject to paragraphs (3) and (4)—

(a) where the notification is given in March of a scheme year the Authority must, by the relevant date specified in the scheme schedule, repay the excess amount to the supplier,

(b) where the notification is given in June, September, or December of a scheme year—

(i) the supplier may, by the relevant date specified in the scheme schedule, request repayment from the Authority of all or part of the excess amount, and

(ii) the Authority may, by the relevant date specified in the scheme schedule, repay the amount requested to the supplier.

(3) The Authority may not repay—

(a) all or part of the excess amount unless it is satisfied that the scheme supplier is not in breach of—

(i) regulation 40 (requirement to pay quarterly levy payments),

(ii) regulation 42 (requirement to pay levy credit payments),

(iii) regulation 49 (requirement to pay backdated levy payments),

(iv) regulation 56 (requirement to make mutualisation payments),

(b) an amount which, if repaid, will result in the scheme supplier’s existing credit cover being less than their credit cover requirement.

(4) The Authority may, instead of repaying the excess amount, repay such lesser amount as the Authority may determine is the amount by which the scheme supplier’s existing credit cover exceeds the scheme supplier’s credit cover requirement on the date that the repayment is made.

(5) In this regulation “the excess amount” has the meaning given in regulation 42(5)(a).

PART 8 — Additional obligations on scheme suppliers

Additional scheme supplier obligations: general

46

A scheme supplier must—

(a) notify the Authority if any of the information provided to the Authority, and on which the scheme supplier’s quarterly levy payment was calculated, was incorrect or ceases to be correct,

(b) where they have provided a letter of credit in accordance with regulation 43, monitor the validity of the issuing person’s credit rating and notify the Authority as soon as reasonably practicable if the issuing person ceases to hold the required credit rating (within the meaning given in regulation 43(5)),

(c) comply with such other requirements as the Authority may specify in relation to the effective administration of the Scheme.

Additional scheme supplier obligations: the provision of information

47

(1) A scheme supplier must provide to the Authority on request any information which the scheme supplier holds and which the Authority requires in order to discharge its functions under, or monitor compliance with, these Regulations.

(2) Information requested under paragraph (1) must be provided within such time as the Authority specifies.

Additional scheme supplier obligations: daily meter point data

48

(1) A scheme supplier must notify the Authority of their meter point data for each day of the period beginning with 31st August 2021 and ending with 31st March 2022, and the sum of their meter point data—

(a) for the period beginning with 30th November 2021 and ending with 31st March 2022, and

(b) for the period beginning with 31st August 2021 and ending with 31st December 2021,

at such time as the Authority may request.

(2) Where a licensed gas supplier becomes a scheme supplier after 30th November 2021, they must notify the Authority of their meter point data for each day of the period of three months preceding the quarter in which they became a scheme supplier, and the sum of the meter point data for that period, at such time as the Authority may request.

(3) A scheme supplier must notify the Authority, in relation to each quarter of the scheme year beginning with 1st April 2022 and each subsequent scheme year, of their meter point data for each day of that quarter, and the sum of the meter point data for that period, by no later than the relevant date specified in the scheme schedule.

(4) Where the Authority does not make a request described in paragraph (1) or (2), or does not specify a relevant date in the scheme schedule for the purposes of paragraph (3)—

(a) it may instead notify a scheme supplier of their assumed meter point data for such period as the Authority may determine, and

(b) that scheme supplier must notify the Authority whether that data is correct, by such time as the Authority may request.

(5) If a scheme supplier does not provide any notification required under paragraph (1), (2), (3) or (4)(b), the Authority must determine the number of meter points served by that supplier on each day of the relevant period.

(6) A scheme supplier must provide the Authority with any information the Authority requires to enable it to verify the supplier’s meter point data.

PART 9 — Changes affecting scheme suppliers

Former provisionally exempt suppliers

49

(1) This regulation applies where a scheme supplier (“SS”) was a provisionally exempt supplier in relation to a scheme year, and was notified in accordance with regulation 38(10)(b) or (11) that they are not an exempt supplier in relation to that scheme year.

(2) The Authority must, within 30 days after the day on which the notification in accordance with regulation 38(10)(b) or (11) is given, calculate and notify SS of the amount of levy payment (“backdated levy payment”) SS must make in relation to that scheme year, the date by which that payment must be made, and details of how that payment must be made.

(3) The backdated levy payment must be calculated by the Authority as follows—

where—

(a) BP is the backdated levy payment,

(b) Me is the sum of SS’s meter point data for each day of that scheme year,

(d) Pm is the sum of any amounts SS would have been required to contribute in any mutualisation processes carried out in accordance with regulation 56 in that scheme year, had they not been a provisionally exempt scheme supplier,

(e) RPm is the sum of any amounts SS would have been paid under regulation 56(10) as a result of a late payment by a defaulting scheme supplier in any mutualisation process carried out in accordance with regulation 56 in that scheme year, had they not been a provisionally exempt scheme supplier, calculated as follows—

where—

(i) PSU is the mutualisation amount which SS would have been required to pay in respect of the relevant default,

(ii) PAU is the total amount of mutualisation payments which were required to be paid by all non-defaulting scheme suppliers in respect of the relevant default,

(iii) PAR is the total amount, including any interest payment, recovered from the defaulting scheme supplier in relation to the relevant default.

(4) For the purposes of paragraph (3), the amount SS would have been required to contribute in any single mutualisation process is calculated as follows—

where—

(a) PDA is the total mutualisation amount in relation to that mutualisation process,

(b) PMPS is the sum of the meter point data for SS for each day of the quarter preceding the quarter in which the mutualisation notices were given to scheme suppliers under regulation 56,

(c) PTMPS is the sum of the meter point data, for all non-defaulting scheme suppliers apart from SS, for each day of the quarter preceding the quarter in which the mutualisation notices were given to scheme suppliers under regulation 56,

(d) meter point data, for the purposes of PMPS and PTMPS, is the meter point data as notified or determined under regulation 48.

(5) SS must pay any backdated levy payment to the Authority in accordance with the notification referred to in paragraph (2).

(6) In this regulation, “defaulting scheme supplier” and “non-defaulting scheme supplier” have the meanings given in regulation 56.

Exempt suppliers

50

(1) This regulation applies where a licensed gas supplier (“GS”) was not a provisionally exempt supplier in relation to a scheme year, and is notified in accordance with regulation 38(10)(b) that they are an exempt supplier in relation to that scheme year.

(2) The Authority must, within 30 days after the day on which that notification is given—

(a) calculate, and notify GS of, the amount of any levy refund payment to which GS is entitled in relation to that scheme year,

(b) pay the levy refund payment to GS out of funds available to it for the purposes of the Scheme,

(c) discontinue any compliance or enforcement action under Part 10 in relation to any breach of these Regulations by GS, other than a breach of regulation 38(3) (notification that a supplier is likely to be an exempt supplier) or regulations 46 to 48 (additional obligations on scheme suppliers), which occurred in relation to that scheme year.

(3) The levy refund payment in relation to a scheme year must be calculated by the Authority as follows—

where—

(a) RP is the amount of the levy refund payment in relation to that scheme year,

(b) Q is the sum of any quarterly levy payments paid by GS to the Authority in relation to that scheme year in accordance with regulation 40,

(i) the sum of any levy credit payments paid by GS to the Authority in relation to that scheme year in accordance with regulation 42, and

(ii) the amount by which GS’s existing credit cover exceeds their credit cover requirement for the quarter in which the levy refund payment is made,

(d) M is the sum of any mutualisation payments paid by GS to the Authority in relation to that scheme year in accordance with regulation 56, less any amount paid to GS under regulation 56(10) as a result of a late payment by a defaulting scheme supplier in any mutualisation process carried out in accordance with regulation 56 in that scheme year,

(e) R is the sum of any amounts recovered by the Authority from GS in relation to that scheme year under any enforcement notice or penalty notice, or as a result of any civil action, and including any interest so recovered, but excluding any amounts recovered from GS in relation to a breach of regulation 38(3),

(f) IA is the sum of—

(i) any interest accrued on quarterly levy payments paid by GS in relation to that scheme year whilst in the bank account referred to in regulation 40(5), and

(ii) any interest accrued on levy credit payments paid by GS in relation to that scheme year whilst in the bank account referred to in regulation 42(4),

(g) ID is the sum of any interest distributed by the Authority to GS in accordance with regulation 44 in relation to that scheme year.

(4) Where the Authority has drawn down GS’s existing credit cover against a letter of credit, in accordance with regulation 55, in relation to a scheme year, the Authority must repay the amount drawn down to the person who provided the letter of credit.

Former scheme suppliers

51

(1) This regulation applies where a scheme supplier ceases to be a scheme supplier, other than by virtue of becoming an exempt supplier.

(2) The former scheme supplier (“F”) must—

(a) notify the Authority of—

(i) the date on which they ceased to be a scheme supplier,

(ii) the reason why they ceased to be a scheme supplier, and

(iii) their meter point data for each day of the final quarter, and

(b) provide the Authority with any information the Authority requires to enable it to verify their meter point data, and such other information as the Authority requests.

(3) The information and notification described in paragraph (2) must be provided to the Authority—

(a) where F ceases to be a scheme supplier by reason of—

(i) ceasing to hold a licence under section 7A(1) of the Gas Act 1986, or

(ii) becoming an insolvent company within the meaning given in section 15A(4) of the Company Directors Disqualification Act 1986[^f00032],

within 3 working days of F ceasing to be a scheme supplier, and

(b) in any other case, within 14 days of F ceasing to be a scheme supplier.

(4) Paragraph (3) does not apply where a scheme supplier provides the Authority with the information required by or under that paragraph before the date on which they cease to be a scheme supplier.

(5) Where F does not provide the meter point data required by paragraph (2)(a)(iii), the Authority must determine the number of meter points served by F on each day of the final quarter.

(6) The Authority must—

(a) if the Authority has not notified F of the quarterly levy payment payable by F in relation to the quarter preceding the final quarter in accordance with regulation 40(2), calculate the quarterly levy payment payable by F in relation to that quarter in accordance with the formula set out in regulation 40(1), and

(b) calculate the quarterly levy payment payable by F in relation to the final quarter in accordance with the formula set out in regulation 40(1), but with the modification that “M” in that formula is the sum of F’s meter point data for each day of the final quarter as notified or determined under this regulation.

(7) The Authority must serve a notice on F specifying—

(a) the sum of the amounts calculated in accordance with paragraph (6) (the “final quarterly levy payment”) and how that amount has been calculated,

(b) the amount of F’s existing credit cover,

(i) F’s existing credit cover exceeds the final quarterly levy payment ..., or

(ii) the final quarterly levy payment exceeds F’s existing credit cover (the “outstanding amount”),

(ca) if the payments made by F by way of credit cover exceed the final quarterly levy payment, the excess amount (the “cash excess”),

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f) where there is an outstanding amount—

(i) the date by which the outstanding amount is required to be paid by F, being—

(aa) 14 days after the date of the notification, or

(bb) the next date on which quarterly levy payments are due under regulation 40,

whichever is the earlier,

(ii) details of how payment of the outstanding amount must be made, and

including information about the matters mentioned in regulation 54 (interest on late payments), and the matters mentioned in regulation 56 (mutualisation).

(7A) Except where paragraph (7B) applies to F and provided that the final quarterly levy payment is greater than £0, the notice referred to in paragraph (7) must also specify—

(a) the date on which F’s existing credit cover will be drawn down and the amount of that draw down,

(b) whether the draw down will be against payments made, or a letter of credit provided, by F, or both.

(7B) This paragraph applies to F where—

(a) F has complied with the obligations in paragraphs (2) and (3),

(b) if this paragraph did not apply to F the Authority would draw down against a letter of credit provided by F in respect of the whole or part of the final quarterly levy payment, and

(c) the letter of credit provided by F will remain an acceptable letter of credit until the date falling 28 days after the date on which the Authority serves a notice under paragraph (7).

(7C) Where paragraph (7B) applies to F, the notice referred to in paragraph (7) must also specify—

(a) the date on which draw down will be made against payments made by F by way of credit cover and the amount of that draw down (if applicable),

(b) the amount payable in lieu of draw down against F’s letter of credit (the “in lieu amount”), which is the amount that the Authority would draw down against the letter of credit if paragraph (7B) did not apply to F,

(c) that provided F pays to the Authority the in lieu amount and any outstanding amount by the date referred to in paragraph (7)(f)(i), the Authority will not draw down against the letter of credit,

(d) details of how any payment may be made,

(e) that where the in lieu amount or outstanding amount, or both, are not paid in full by the date referred to in paragraph (7)(f)(i), the Authority will draw down against the letter of credit, as soon as is reasonably practicable, the amount required to discharge F’s final quarterly levy payment or, if the letter of credit is insufficient to discharge F’s final quarterly levy payment, the maximum amount specified in the letter of credit.

(7D) Where regulation 43A(2)(f) applies in respect of an amount otherwise payable by or to F under paragraph (8) or (9)—

(a) paragraph (7)(f) (if otherwise applicable) does not apply;

(b) the notice referred to in paragraph (7) must also specify that no amount is payable in respect of the cash excess or the outstanding amount,

(i) for paragraph (7C)(c) there were substituted—

(c) that provided F pays to the Authority the in lieu amount by the date referred to in paragraph (7E), the Authority will not draw down against the letter of credit,

(ii) for paragraph (7C)(e) there were substituted—

(e) that where the in lieu amount is not paid in full by the date referred to in paragraph (7E), the Authority will draw down against the letter of credit, as soon as is reasonably practicable, an amount required to discharge the in lieu amount.

(7E) The date referred to in paragraph (7D)(c)(i) and (ii) is the date—

(a) 14 days after the date of the notice, or

(b) the next date on which quarterly levy payments are due under regulation 40,

whichever is the earlier.

(8) Where paragraph (7)(f) applies, F must pay the outstanding amount to the Authority in accordance with any notification referred to in paragraph (7).

(9) Where there is a cash excess, the Authority must pay the cash excess to F as soon as reasonably practicable after the date on which F’s existing credit cover is drawn down.

(9A) The Authority must pay to F any interest that has accrued on levy credit payments paid by F whilst in the bank account referred to in regulation 42(4) as soon as reasonably practicable after—

(a) in relation to interest paid into the bank account before the date on which the Authority serves a notice under paragraph (7), the date on which the Authority serves a notice under paragraph (7),

(b) in relation to interest paid into the account on or after the date on which the Authority serves a notice under paragraph (7), the date on which the interest is paid into the Authority’s bank account.

(9B) Where the final quarterly levy payment would be a de minimis amount if payable by F, the final quarterly levy payment is £0.

(10) Where immediately before F ceases to be a scheme supplier F was liable to pay, or entitled to receive payment of, any amount under these Regulations, F remains subject to that liability, or to that entitlement, after F ceases to be a scheme supplier, subject to paragraphs (11) to (13).

(11) Regulation 38(8) to (13) continues to apply in relation to F as if F were still a scheme supplier for the purposes of determining whether—

(a) F is an exempt supplier in relation to the scheme year preceding the final scheme year,

(b) F is an exempt supplier in relation to that part of the final scheme year in which F was a scheme supplier, but as if—

(i) references to “a scheme year”, “the scheme year” and “that scheme year” were references to that part of the final scheme year in which F was a scheme supplier,

(ii) in paragraphs (8) and (9), for “by 1st July following the end of that scheme year” there were substituted “within three months of ceasing to be a scheme supplier”,

(iii) in paragraph (10)(b), for “by the relevant date specified in the scheme schedule” there were substituted “within 30 days of the date on which it received the notification and information referred to in paragraph (8)”,

(iv) in paragraph (11), for “by the relevant date specified in the scheme schedule” there were substituted “within 30 days of the date on which it received the notification and information referred to in paragraph (8)”.

(12) Regulation 49 continues to apply in relation to F as if F were still a scheme supplier—

(a) for the purposes of the calculation of any backdated levy payment in relation to the scheme year preceding the final scheme year, but with the modification that the Authority may determine not to require payment of any backdated levy payment by F,

(b) for the purposes of the calculation of any backdated levy payment in relation to the final scheme year, but—

(i) as if references to “a scheme year” and “that scheme year” were references to that part of the final scheme year in which F was a scheme supplier,

(ii) with the modification that the Authority may determine not to require payment of any backdated levy payment by F.

(13) Regulation 50 continues to apply in relation to F as if F were still a scheme supplier—

(a) for the purposes of the calculation of any levy refund payment to which F is entitled in relation to the scheme year preceding the final scheme year,

(b) for the purposes of the calculation of any levy refund payment to which F is entitled in relation to the final scheme year, but as if —

(i) references to “a scheme year” and “that scheme year” were to that part of the final scheme year in which F was a scheme supplier,

(ii) for paragraph (3)(c) there were substituted—

(c) C is the sum of any levy credit payments paid by F to the Authority in relation to the final scheme year in accordance with regulation 42,

(14) For the purposes of this regulation—

(a) “the final quarter”, in relation to F, means the last quarter during any part of which F was a scheme supplier,

(b) “the final scheme year”, in relation to F, means the scheme year in which F ceases to be a scheme supplier.

PART 10 — Compliance and enforcement: scheme suppliers

Anticipated default notices

52

(1) The Authority may serve a notice (an “anticipated default notice”) on a scheme supplier where the Authority reasonably believes it is likely that the scheme supplier will fail to pay—

(a) a quarterly levy payment in accordance with regulation 40,

(b) a levy credit payment in accordance with regulation 42,

(d) a backdated levy payment in accordance with regulation 49, or

(e) a mutualisation payment in accordance with regulation 56.

(2) An anticipated default notice—

(a) must specify—

(i) the amount of quarterly levy payment, levy credit payment, additional credit cover, backdated levy payment, or mutualisation payment, (the “relevant amount”), and the date on which payment of the relevant amount is due,

(ii) where applicable, how the relevant amount has been calculated, and

(iii) the grounds on which the Authority reasonably believes the scheme supplier is likely to fail to pay the relevant amount,

(b) must include information about—

(i) the matters mentioned in paragraphs (3) to (7),

(ii) where appropriate, the matters mentioned in regulation 54 (interest on late payments), regulation 55 (draw down of credit cover), and regulation 56 (mutualisation), and

(iii) appeals under regulation 60, and

(3) The Authority must publish an anticipated default notice, and any other notice served under paragraph (4), as soon as reasonably practicable after the date on which it is served.

(4) An anticipated default notice may be varied or revoked at any time by the Authority by serving a further notice, including a further anticipated default notice or an enforcement notice, on the scheme supplier.

(5) Where the scheme supplier pays all or part of the relevant amount after the service of the anticipated default notice, the Authority must publish—

(a) the fact that the scheme supplier has paid all or part of the relevant amount (as the case may be),

(b) where the scheme supplier has paid part of the relevant amount, the amount paid, and

(6) Any information published in accordance with paragraph (3) or (5) must be published for a minimum period of 12 months, and may be published for such longer period as the Authority may decide.

(7) Where—

(a) the Authority has served an anticipated default notice, and

(b) any part of the amount specified in that notice is not paid by the date on which payment of the amount is due (“the due date”),

on the day after the due date the anticipated default notice is deemed to be an enforcement notice served in accordance with regulation 53(1) in respect of such amount as remains outstanding.

Enforcement notices

53

(1) The Authority may serve a notice (an “enforcement notice”) on a scheme supplier where—

(a) the Authority is satisfied that the scheme supplier has failed to pay—

(i) a quarterly levy payment in accordance with regulation 40,

(ii) a levy credit payment in accordance with regulation 42,

(iii) any additional credit cover,

(iv) a backdated levy payment in accordance with regulation 49,

(v) a mutualisation payment in accordance with regulation 56, or

(vi) interest on a payment referred to in paragraph (i), (iv) or (v) due in accordance with regulation 54, or

(b) the Authority reasonably believes that the scheme supplier has failed to comply with any other obligation imposed on scheme suppliers under Part 7, 8, or 9.

(2) An enforcement notice served in the circumstances referred to in paragraph (1)(a) must—

(a) specify—

(i) the amount of quarterly levy payment, levy credit payment, additional credit cover, backdated levy payment, or mutualisation payment the scheme supplier has failed to pay (the “outstanding amount”),

(ii) where applicable, how the outstanding amount has been calculated,

(iii) where regulation 54 (interest on late payments) applies, any interest due on the outstanding amount at the date the enforcement notice is served and how that amount of interest has been calculated,

(iv) the sum of the outstanding amount and the interest due (“the total amount due”),

(v) the date by which the scheme supplier must pay the total amount due or, where the outstanding amount is a levy credit payment or additional credit cover, the date by which they must pay the total amount due or provide an acceptable letter of credit (or both) in respect of that amount, and

(vi) how the total amount due must be paid, and

(b) include information about the matters mentioned in—

(i) regulation 55 (draw down of credit cover), and

(ii) regulation 56 (mutualisation).

(3) An enforcement notice served in the circumstances referred to in paragraph (1)(b) must specify—

(a) the provision of these Regulations which the Authority believes has been breached,

(b) the matters constituting the breach,

(d) the date by which those steps must be taken.

(4) An enforcement notice must include information about appeals under regulation 60.

(5) The Authority must publish an enforcement notice, and any other notice served under paragraph (6), as soon as reasonably practicable after the date on which it is served.

(6) An enforcement notice may be varied or revoked at any time by the Authority by serving a further notice, including a further enforcement notice, on the scheme supplier.

(7) A scheme supplier on whom an enforcement notice is served must comply with the requirements of that enforcement notice.

(8) The duty imposed by paragraph (7) is enforceable in civil proceedings by the Authority for—

(a) an injunction,

(b) specific performance of a statutory duty under section 45 of the Court of Session Act 1988[^f00033], or

Interest

54

(1) Where—

(a) a scheme supplier fails to pay the Authority all or any part of the following by the date on which it is due—

(i) a quarterly levy payment,

(ii) a backdated levy payment,

(iii) a mutualisation payment,

(iv) a financial penalty, or

(v) a backdated levy payment due in accordance with regulation 49(5), or

(b) a former scheme supplier fails to pay the Authority all or any part of an outstanding amount due in accordance with regulation 51(8),

the Authority must require the scheme supplier, or the former scheme supplier (as the case may be) to pay interest, calculated in accordance with paragraph (2), on the amount which remains unpaid.

(2) The interest payable under paragraph (1) is simple interest calculated from day to day on the unpaid amount from the date by which payment of the amount is due until the date when payment is made, at a rate of 8 per cent per annum over the Bank of England base rate.

(3) For the purpose of this regulation the “Bank of England base rate” means—

(a) the rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets, or

(b) where an order under section 19 of the Bank of England Act 1998[^f00034] (reserve powers) is in force, any equivalent rate determined by the Treasury under that section.

Draw down of credit cover

55

(1) This regulation applies where—

(a) a scheme supplier (the “defaulting scheme supplier”) fails to pay the whole or any part of—

(i) a quarterly levy payment in accordance with regulation 40, or

(ii) a mutualisation payment required in accordance with regulation 56, or

(b) the Authority has served a notice under regulation 51(7) on a former scheme supplier (the “defaulting scheme supplier”) and the final quarterly levy payment specified in the notice is greater than £0.

(2) The Authority must draw down the defaulting scheme supplier’s existing credit cover no earlier than—

(a) where paragraph (1)(a) applies, the next working day after the day on which payment of the unpaid amount was due, or

(b) where paragraph (1)(b) applies, the next wording day after the date specified in the notice in accordance with regulation 51(7A)(a) or (7C)(a) or (e) (as applicable).

(2A) The Authority must not draw down against a letter of credit provided by the defaulting scheme supplier in relation to the defaulting scheme supplier’s final quarterly levy payment where—

(a) regulation 51(7B) applies to the supplier, and

(b) the defaulting scheme supplier has paid to the Authority by the date specified in the notice an amount required to discharge the defaulting scheme supplier’s final quarterly levy payment or, where regulation 51(7D)(c)(ii) applies, the in lieu amount.

(2B) The Authority may also draw down the defaulting scheme supplier’s existing credit cover in respect of any interest (calculated in accordance with regulation 54) due on the amount that the defaulting scheme supplier has failed to pay.

(3) Where the Authority draws down a defaulting scheme supplier’s existing credit cover, the Authority must notify the defaulting scheme supplier of that draw down and the notification must specify—

(a) the amount of the defaulting scheme supplier’s existing credit cover subject to the draw down, and

(b) whether the draw down is against payments made, or a letter of credit provided, by the defaulting scheme supplier, or both.

(4) Where draw down is against payments made by the defaulting scheme supplier, the amount drawn down is treated as a payment by the defaulting scheme supplier in respect of their quarterly levy payment , mutualisation payment, final quarterly levy payment or interest payment (as the case may be).

(5) Where draw down is against a letter of credit provided by the defaulting scheme supplier—

(a) the Authority must take steps to demand payment from the person who provided the letter of credit for the lesser of—

(i) the amount which can be demanded under that letter of credit, and

(ii) the unpaid amount, and

(b) the amount which is paid to the Authority under that letter of credit is treated as a payment by the defaulting scheme supplier in respect of their quarterly levy payment , mutualisation payment, final quarterly levy payment or interest payment (as the case may be), made at the time that amount is received by the Authority.

(6) The Authority may draw down against a letter of credit provided by a defaulting scheme supplier notwithstanding that the letter of credit has ceased to constitute an acceptable letter of credit.

Mutualisation

56

(1) The Authority must carry out a process (a “mutualisation process”) in accordance with this regulation where—

(a) the first condition or the second condition, or both of them, are satisfied, and

(b) the third condition is satisfied.

(2) The first condition is that—

(a) a scheme supplier (the “defaulting scheme supplier”) has failed to pay the whole or part of a quarterly levy payment in accordance with regulation 40, and

(b) where draw down has occurred in accordance with regulation 55 in relation to that failure, the amount drawn down was less than the amount the defaulting scheme supplier had failed to pay.

(3) The second condition is that—

(a) a former scheme supplier (the “defaulting scheme supplier”) has failed to pay the whole or part of an outstanding amount in accordance with regulation 51(8), ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The third condition is that, when notices are given under paragraph (5)(b), the total of any unpaid amounts to be recovered (the “total mutualisation amount”) exceeds the Authority’s estimated administrative costs of carrying out the mutualisation process.

(5) Where the Authority carries out a mutualisation process, the Authority must—

(a) calculate—

(i) the total mutualisation amount,

(ii) the amount a scheme supplier other than a defaulting scheme supplier (a “non-defaulting scheme supplier”) is to pay, in accordance with paragraph (7), and

(b) give notice to each of the non-defaulting scheme suppliers (a “mutualisation notice”) specifying—

(i) that the non-defaulting scheme supplier is liable to make a payment of the amount apportioned to them, calculated in accordance with paragraph (7) (a “mutualisation payment”),

(ii) the date by which the mutualisation payment must be made, and

(iii) details of how the mutualisation payment must be made,

and including information about the matters mentioned in regulation 55 (draw down of credit cover).

(6) A mutualisation notice may not be given earlier than seven days after—

(a) the date on which payment of the quarterly levy payment or the outstanding amount (as the case may be) was due, or

(b) where the mutualisation process is carried out in relation to two or more unpaid amounts, the latest date on which any such amount was due.

(7) A mutualisation payment payable by a non-defaulting scheme supplier is the amount given by—

where—

(a) TMA is the total mutualisation amount,

(b) MPS is the sum of the meter point data for that non-defaulting scheme supplier for each day of the quarter in relation to which the defaulting scheme supplier failed to pay, as notified or determined under regulation 48, and

(c) TMPS is the sum of the meter point data for all the non-defaulting scheme suppliers for each day of the quarter in relation to which the defaulting scheme suppliers failed to pay, as notified or determined under regulation 48.

(8) A non-defaulting scheme supplier given a mutualisation notice under paragraph (5)(b) must pay the mutualisation payment to the Authority by the date specified in the notice.

(9) If the Authority receives the whole or part of an unpaid amount from a defaulting scheme supplier before the mutualisation notices are given to non-defaulting scheme suppliers the Authority must—

(a) where necessary recalculate the amounts referred to in paragraph (5)(a), and

(b) where a defaulting scheme supplier has paid the whole of the unpaid amount referred to in paragraph (2) or (3) (as the case may be), they are a non-defaulting scheme supplier for the purposes of paragraph (5).

(10) If the Authority receives an unpaid amount from a defaulting scheme supplier after giving mutualisation notices to non-defaulting scheme suppliers the Authority must, as soon as reasonably practicable after the date specified under paragraph (5)(b)(ii) in relation to that mutualisation, distribute the amount received, including any interest payment, from the defaulting scheme supplier among the non-defaulting scheme suppliers who have made mutualisation payments, as follows—

where—

(a) AD is the amount due to be paid to a non-defaulting scheme supplier,

(b) SU is the mutualisation amount which the non-defaulting scheme supplier paid in respect of the relevant default,

(c) AU is the total amount of mutualisation payments which were paid by all non-defaulting scheme suppliers in respect of the relevant default, and

(d) AR is the total amount, including any interest payment, recovered from the defaulting scheme supplier.

Penalty notices

57

(1) The Authority may serve a notice (a “penalty notice”) on a scheme supplier where the Authority is satisfied that the scheme supplier—

(a) knowingly provided false or misleading information—

(i) to the Authority pursuant to regulation 38 (notification that a supplier is likely to be an exempt supplier), or regulation 46, 47, or 48 (obligations on scheme suppliers to provide information),

(ii) to a person instructed in accordance with regulation 38(4)(a),

(b) has failed to comply with any other obligation imposed on scheme suppliers under Part 7, 8 or 9, or this Part.

(2) A penalty notice may impose a financial penalty on the scheme supplier of such amount as the Authority deems reasonable in all the circumstances of the case, provided that the amount may not exceed 10% of the scheme supplier’s relevant turnover.

(3) Before serving a penalty notice on a scheme supplier, the Authority must—

(a) notify the scheme supplier that it proposes to impose a financial penalty, and the notification must specify—

(i) the amount of the financial penalty proposed to be imposed,

(ii) the Authority’s reason for proposing to impose the financial penalty,

(iii) the basis on which the Authority determined the amount of the proposed financial penalty,

(iv) a period of not less than 21 days beginning with the date on which the notification is served on the scheme supplier within which representations may be made to the Authority with respect to the proposed financial penalty,

(b) publish the matters referred to in sub-paragraph (a) in such manner as the Authority considers appropriate for the purpose of bringing them to the attention of persons likely to be affected by them,

(d) determine whether to serve the penalty notice and, if so, whether to make any changes to the terms of the proposed penalty notice.

(4) A penalty notice must—

(a) specify—

(i) the amount of the financial penalty,

Reading this document does not replace reading the official text published on legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. We assume no responsibility for any inaccuracies arising from the conversion of the original CLML XML to this format.

This text is published under legislation.gov.uk's own terms of reuse, not a Legalize or public-domain licence. legislation.gov.uk
Open Government Licence v3.0 (attribution required)
© Crown and database right. Derived from content available under the Open Government Licence v3.0 from legislation.gov.uk.