The Electricity Generator Levy is a 45% temporary tax on exceptional in-scope generation receipts (above a benchmark price, currently £75/MWh indexed, with a £10m annual allowance and a 50GWh de minimis) earned by large low-carbon electricity generators in the UK. It runs from 1 January 2023 to 31 March 2028 under Part 5 of Finance (No.2) Act 2023 and is collected through the Corporation Tax return.
The levy captures windfall revenues arising from gas-set wholesale electricity prices in 2022-23 and offsets the cost of household and business energy bill support, but its design has been contested for its asymmetry with the Energy Profits Levy's investment allowances, which generators argue penalises low-carbon investment relative to oil and gas. A King's Speech 2026 Bill and a flagged rate increase from 1 July 2026 now place the regime back into active legislative play.
On 21 April 2026 the Exchequer Secretary issued written ministerial statements confirming a rate increase from 1 July 2026, accompanied by a fresh HMRC technical note; the King's Speech 2026 then named an Electricity Generator Levy Bill in the Government's legislative programme, taking the thread into pre-legislative scrutiny.
Names the EGL Bill in the 2026 legislative programme, signalling primary-legislation reform of the levy framework currently sitting in Part 5 of Finance (No.2) Act 2023.
Foundational tax information and impact note introducing the 45% levy on exceptional electricity generation receipts from 1 January 2023 to 31 March 2028.
Exchequer Secretary's Commons statement confirming the EGL rate increase from 1 July 2026 and signalling primary legislation.
Mirroring Lords WMS by Lord Livermore relaying the Exchequer Secretary's EGL announcement.
Original announcement positioning EGL alongside the EPL changes as the joint response to extraordinary 2022 energy receipts.
Companion EPL design — relevant for cross-regime parity arguments raised by renewables generators.
Inserts s.311A into Finance (No.2) Act 2023 to exempt receipts from qualifying new generating plant where there was a significant likelihood on 21 November 2023 of the project not proceeding.
Original technical note setting out the £75/MWh benchmark, £10m annual allowance, group-level reporting, and integration with the CT return.
Costed exemption (-£5m to -£85m across 2025/26 to 2027/28) for receipts from new generating stations where the substantive investment decision was taken on or after 22 November 2023.
Explains how the substantive-decision test applies in practice, including capacity increases at existing stations being treated as a separate generating station.
HMRC technical note explaining the rate uplift to take effect from 1 July 2026, alongside the announcement of further primary legislation.
HMRC EQIA concluding no specific impacts on protected characteristic groups beyond a Welsh language service obligation; flags CT600 box additions from April 2024.
Price-based termination mechanism for the EPL — analytical reference for whether the EGL acquires a similar floor mechanism.
Operationalising regulations for the EPL's ESIM price-trigger; relevant cross-regime precedent for any EGL price-trigger mechanism.
EAC concludes Government is not providing renewable generators with the same level of generous tax reliefs for new investment as upstream oil and gas under EPL — the key cross-regime equity critique.
Library briefing on the parallel EPL Bill, providing the comparator framework for EGL design questions.
Labour Government's reform of the EPL (rate to 38%, extension to 31 March 2030, removal of the 29% investment allowance) — sets the comparator for any EGL recalibration.
Why linked: King's Speech 2026 Background Briefing Notes name the EGL Bill, taking the thread to pre-legislative scrutiny.
The Electricity Generator Levy (EGL) was introduced in 2023 and is a temporary tax on windfall revenues for large renewables.
Why linked: Commons WMS HCWS1528 confirms the rate increase and intent to legislate.
the rate of the Energy Profits Levy will increase to 38% from 1 November 2024, bringing the headline rate of tax on upstream oil and gas activities to 78%
Why linked: The July Statement 2024 EPL reform sets the cross-regime comparator and political baseline for any EGL recalibration.
An exemption for receipts from new investments in electricity generating stations will strengthen the incentives for renewable energy generators to expand
Why linked: Autumn Statement 2023 commitment delivered through Finance Bill 2023-24 New Clause 5 inserting s.311A.
In response to: Electricity Generator Levy (EGL)
HMRC's screening impact equality assessment for the Electricity Generator Levy (EGL).
Why linked: Commons Briefing Paper CBP-9578 on Energy Profits Levy Bill - legislative scrutiny document
Type: Commons Briefing Paper (CBP-9578) The Energy (Oil and Gas) Profits Levy Bill 2022-23 is to introduce a new temporary levy on North Sea oil and gas production.
Why linked: Select Committee report covering Energy Profits Levy Bill among other measures
Select Committee report covering Energy Profits Levy Bill among other measures
In response to: Cost of Living Support
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The Electricity Generator Levy is a 45% receipts tax on the exceptional revenues of large low-carbon UK generators, legislated as Part 5 of Finance (No.2) Act 2023 and running to 31 March 2028 1. The thread is now in active legislative motion: on 21 April 2026 the Exchequer Secretary's written statement HCWS1528 confirmed a rate increase from 1 July 2026 2, a HMRC technical note set out the operational details on 6 May 2026 3, and the King's Speech 2026 named an Electricity Generator Levy Bill in the legislative programme 4. The Bill arrives onto an architecture that already includes the 2024-inserted new investment exemption protecting post-22 November 2023 project pipelines 56, and that has long attracted Environmental Audit Committee criticism of asymmetry against the more investment-friendly Energy (Oil and Gas) Profits Levy 78.
EGL sits in the Corporation Tax administrative machinery: a generating undertaking (a generator or a group containing one) reports through two dedicated CT600 boxes introduced in April 2024, supported by Quantification Notices on each in-year payment and Quarterly Instalment Payments 1. The levy bites at 45% on receipts exceeding a £75/MWh benchmark (indexed), with a £10m annual allowance and a 50GWh annual generation threshold 2. Contracts-for-difference revenue is outside scope; capital allowances and ordinary CT deductions are not available against the EGL base 3. The only substantive carve-out is the new investment exemption inserted as s.311A of Finance (No.2) Act 2023 by Finance Bill 2023-24 New Clause 5: it exempts receipts from qualifying new generating plant where there was a significant likelihood on 21 November 2023 of the project not proceeding, including capacity uplifts at existing stations treated as separate stations under s.283 45. The most recent ministerial position is that the rate increases from 1 July 2026, with primary legislation to follow under the Bill named in the King's Speech 2026 67. The parallel EPL regime — reformed at the July Statement 2024 to 38% with the 29% investment allowance abolished and the lifespan extended to 31 March 2030 8 — remains the comparator the renewables industry uses to argue EGL design is asymmetric.
In the last six months the thread has moved from steady-state administration into active legislative reform. The King's Speech 2026 on 13 May 2026 named the Electricity Generator Levy Bill in the Government's programme 1. That followed twin written ministerial statements on 21 April 2026 — HCWS1528 in the Commons and HLWS1535 in the Lords — confirming a rate increase from 1 July 2026 and characterising EGL as 'a temporary tax on windfall revenues for large renewables' 23. HMRC then published a technical note on 6 May 2026 operationalising the rate increase 4. Parliamentary scrutiny has tracked the announcement: a 29 April 2026 PQ pressed DESNZ on the marginal pricing mechanism's interaction with affected generator revenue 5, and a further PQ tested marginal-pricing assumptions 6. Adjacent to the EGL itself, the Renewables Obligation indexation consultation outcome was published on 28 January 2026 and the Climate Change Levy electrolytic-hydrogen consultation outcome on 26 November 2025 — both relevant to the net revenue position of in-scope generators.
Five questions dominate the next twelve months. First, the operative statutory rate in the Bill: the WMS of 21 April 2026 and the 6 May 2026 HMRC technical note announce a rate increase from 1 July 2026 but the headline percentage will be carried in the Finance Bill clauses 12. Second, whether the Bill reopens the £75/MWh benchmark, the £10m annual allowance, the 50GWh threshold, or the 31 March 2028 sunset — all design parameters set in 2022-23 34. Third, whether EGL acquires a price-trigger termination analogous to the Energy Security Investment Mechanism legislated for the parallel EPL under SI 2024/1175 56; renewable generators have argued for symmetry of treatment, and the Government's 2024 EPL reform created a clear precedent. Fourth, the future of the new investment exemption inserted as s.311A: whether the 21 November 2023 substantive-decision test remains the operative gateway, whether the Treasury exercises its power to deem classes of qualifying projects, and whether the exemption's costed -£85m in 2027/28 is preserved 78. Fifth, cross-regime parity: the Environmental Audit Committee's finding that the Government was not providing renewables with comparable investment reliefs to those available under the EPL 9 is the structural critique the Bill will be measured against, particularly given that the 29% EPL investment allowance was itself abolished at the July Statement 2024 10. Watch the Bill's accompanying TIIN, EQIA refresh and any OBR scoring for early signals.
The Bill's text is not yet on the public record; the King's Speech briefing-notes entry is the only public reference for scope 1. Inferred from corpus gap: the King's Speech 2026 PDF body was not retrieved as a document block in this build, so the Bill's stated scope is inferred from the briefing-notes index entry rather than the briefing-notes narrative itself. Inferred from corpus gap: no fresh OBR or NAO scoring of the rate-rise package is in the corpus, so the fiscal trajectory comparison with the original 2022-23 TIIN figures cannot be settled here 2. Inferred from corpus gap: live ministerial-currency flags for the 21 April 2026 signatories were unavailable in the facts pack, so historical phrasing is used throughout. The cross-regime parity critique 3 is well-evidenced but the Government's response in the 2026 Bill is the live question.
Coverage here is the Electricity Generator Levy and its closest parity comparator the Energy (Oil and Gas) Profits Levy. Adjacent energy-tax measures appear only where they affect in-scope generator economics: the Climate Change Levy electrolytic-hydrogen and Renewables Obligation indexation outcomes are flagged as adjacent context; consumer-side energy price caps, network charges, and grid-infrastructure investment are out of scope per the thread definition.
Bills and Acts this regime substantively depends on. Links go to the bill's own thread on this site (where available) and to bills.parliament.uk.
Pre-introduction Bill named in the King's Speech 2026, expected to legislate the rate increase from 1 July 2026 and any wider recalibration of Part 5 of Finance (No.2) Act 2023.
Part 5 of the Act is the originating statutory basis for the EGL: 45% charge on exceptional generation receipts from 1 January 2023 to 31 March 2028.
Inserted s.311A into Finance (No.2) Act 2023 via Finance Bill 2023-24 New Clause 5, creating the new investment exemption tied to the 21 November 2023 substantive-decision test.
Parallel windfall-tax framework on upstream oil and gas; the EPL's investment-allowance design and the ESIM price-trigger under SI 2024/1175 are the principal cross-regime comparators for EGL reform.
The Electricity Generator Levy is a receipts tax bolted onto the Corporation Tax administrative chassis. Part 5 of Finance (No.2) Act 2023 creates a discrete charge on a 'generating undertaking' (a stand-alone generator or a corporate group containing one) for any 'exceptional generation receipts' above a benchmark price, currently £75/MWh and indexed. The levy is 45%, applies group-wide through a single responsible company, and bites only on generation receipts above a £10m annual allowance and from undertakings generating more than 50GWh a year. It is collected through the CT600 with two dedicated EGL boxes from April 2024, supported by Quantification Notices on each in-year payment and by Quarterly Instalment Payments.
This is deliberately a parallel regime to Corporation Tax, not an adjustment of it. CT taxes profits; EGL taxes a defined slice of revenue. Capital allowances and ordinary CT deductions are not available against the levy base, which is part of why the regime has attracted cross-regime equity arguments against the Energy (Oil and Gas) Profits Levy: under the EPL, the 80% decarbonisation allowance and (until 1 November 2024) the 29% investment allowance allowed upstream operators to flow new investment through the levy base in a way EGL never permitted to low-carbon generators.
The 2023 architecture has one substantive carve-out: the new investment exemption inserted by Finance Act 2024 as s.311A of Finance (No.2) Act 2023. It exempts receipts from qualifying new generating plant where, on 21 November 2023, there was a significant likelihood of the project not proceeding. For new stations the whole receipts are exempt; for capacity uplifts at existing stations only the receipts fairly attributable to the additional capacity (per s.283) are exempt, with the additional capacity treated as a separate station. A Treasury power lets a class of projects be deemed to meet the new investment condition. Contracts-for-difference revenue is outside the levy entirely.
The 21 April 2026 WMSs and the 6 May 2026 HMRC technical note set out the next layer: a rate increase taking effect from 1 July 2026, with primary legislation to be brought through the Electricity Generator Levy Bill announced in the King's Speech 2026. The Bill is pre-introduction, so its precise scope — whether it touches the £75/MWh benchmark, the £10m allowance, the 50GWh threshold, the 31 March 2028 sunset, or introduces a price-trigger termination mechanism analogous to the EPL's ESIM under SI 2024/1175 — is not yet on the public record.
The regime sits in a wider energy-tax ecosystem the analyst should treat as connected but distinct: the EPL (cross-regime parity arguments), the Climate Change Levy (electrolytic hydrogen treatment), the Renewables Obligation indexation changes, and the contracts-for-difference scheme. Each of these affects net generator revenue but operates on a separate statutory footing.
A stand-alone company or a group of companies containing one or more generators of electricity in the UK, with one responsible group member reporting EGL.
Receipts from wholesaling electricity that exceed the benchmark price (originally £75/MWh, indexed) over an accounting period, recognising specified exceptional costs in limited circumstances.
Met where, as of 21 November 2023, there is a significant likelihood — more than a small, negligible or fanciful risk — of a qualifying project not going ahead.
A project to commission a new generating station, an existing station where substantially the whole generating plant is replaced, or a project that increases the capacity of an existing station (with the additional capacity treated as a separate station).
The price ceiling above which receipts become 'exceptional' for EGL purposes.
EGL rate increase takes effect under the design announced in the 21 April 2026 WMS and 6 May 2026 HMRC technical note — watch for the operative statutory rate in the accompanying Finance Bill clauses.
Introduction text of the Electricity Generator Levy Bill named in the King's Speech 2026, including whether the £75/MWh benchmark, £10m allowance, 50GWh threshold or 31 March 2028 sunset are reopened.
Whether the EGL acquires an Energy Security Investment Mechanism-style price-trigger termination analogous to SI 2024/1175 for the EPL.
Statutory sunset of the EGL as originally legislated in Part 5 of Finance (No.2) Act 2023 — unless the 2026 Bill extends it.
On the 2026 Bill: the Treasury characterises EGL as a temporary windfall tax on large renewables and is legislating a rate increase from 1 July 2026 alongside the King's Speech 2026 Bill, while retaining the 2023 new investment exemption to protect post-22 November 2023 project pipelines.Apr 2026May 2026Dec 2023
Tension with Environmental Audit Committee
On administrative design: HMRC delivers the levy through two dedicated CT600 boxes from April 2024, Quantification Notices and QIPs, and has published the 6 May 2026 technical note operationalising the rate increase from 1 July 2026; the screening EQIA records no specific impacts beyond the Welsh-language obligation.Apr 2024May 2026
On the rate-rise package: the WMS HCWS1528 of 21 April 2026 confirms the EGL rate increase from 1 July 2026 and signals the legislative vehicle that became the King's Speech 2026 Bill.Apr 2026
On the rate-rise package: relayed the Exchequer Secretary's 21 April 2026 EGL statement to the Lords via HLWS1535, mirroring the Commons position.Apr 2026
On the 2023 new investment exemption: signed off the TIIN as Exchequer Secretary, articulating the policy objective that exempting receipts from new generating stations would 'strengthen the incentives for renewable energy generators to expand' and protect energy security.Dec 2023
On cross-regime parity: concluded that the Government was not providing renewable generators with the same level of generous tax reliefs for new investment as oil and gas operators receive under the EPL, framing the EGL/EPL asymmetry as a policy failure.Jan 2023
Tension with HM Treasury
On administrative ownership: raised concerns that HM Treasury and HMRC have historically viewed the consequences of environmental taxes as the responsibility of other departments — a structural critique relevant to which department owns EGL outcomes.Apr 2021