LONDON, Oct. 21 (UPI) -- U.K. businesses are condemning a $1.5 billion yearly green tax they say will add 11 percent to the annual energy bills of British companies.
About 5,000 large and medium-sized companies with energy bills of more than $750,000 per year will be hit by the new tax, The Daily Telegraph reported.
The Treasury says it will collect the tax from all businesses forced to enter its Carbon Reduction Commitment scheme.
A green measure due to be introduced in April 2011 would force companies to buy "allowances" at $18 for every ton of carbon dioxide they emit.
Under the original plan, the best performing businesses would have received rebates if they reduced emissions, while poor performers would pay in full.
Under the new tax proposed by the government, the scheme will now simply penalize all companies according to the amount of carbon dioxide they produce.
Analysts said the changes will cost an extra $119,000 per year in the first year, rising to $180,000 per year by 2015, for a business with an average $1.5 million gas and electricity bill.
Business leaders were quick to condemn the changes.
"If the private sector is going to play a greater role in increasing investment and driving growth it needs clarity and stability," manufacturing industry group spokesman Steve Radley said.
"By changing the rules six months after the game has started and landing business with an unsignalled £1bn ($1.5 billion) tax rise the government has sent an unwelcome signal to business."
