A NEW tax on energy use could put a further strain on North-East businesses, according to chartered accountants Keith Robinson & Co.

The climate change levy, which comes into effect from April 1, is designed to encourage businesses to be more energy efficient.

It is a tax on energy use in industry, commerce, agriculture and the public sector. Businesses across the North-East will pay the levy via their energy bills.

Discounts of up to 80 per cent will be available to customers who sign up to energy-saving targets agreed between the Government and trade associations.

The horticulture sector will be eligible for a 50 per cent discount in the rate levy for up to five years and electricity for new forms of renewable energy will be exempt.

Andrew Rowe, from Keith Robinson & Co's Middlesbrough office, said: "The Climate Change Levy can be seen as a positive move by the Government to address the issue of climate change and to protect the environment.

"However, this is yet another tax on business and yet more red tape for the region's businesses to contend with. The levy is also like a double tax on energy. VAT at 17.5 per cent will still be payable on energy supplies, and the levy itself will also be subject to VAT.

"The region's businesses will have to budget very carefully in order to prepare for its introduction in April."