Ensure you - and where appropriate your clients - will not be among the thousands of UK companies that could well end up handing the government a windfall of more than £230 million in penalties if they fail to comply with the new Carbon Reduction legislation.

Recent surveys indicate that around sixty-six per cent of the thousands of businesses which will be affected by new regulations are unaware of their responsibilities - and the possible repercussions on their cash flow.

  “The vast majority of companies just don’t realise what that the new carbon reduction legislation means for them,” said Gordon Mowat CA of business improvement specialists Aspire Management Services.

“If they don’t get expert help or prepare themselves they might just end up with major financial headache. They can expect a big hit in the pocket in the form of fines on top of the money they are squandering through inefficiency.

“Part of planning for business success is preparing for changes and constantly keeping up to date with legislation.”

Glasgow-based Energy Solutions Consultants has estimated that businesses could end up forking out at least £70,000 each if they don’t comply with the new rules which came into force on April 1st.

The CRC Energy Efficiency Scheme, formerly known as the Carbon Reduction Commitment, is a compulsory energy efficient emissions trading system central to the UK’s strategy for improving energy efficiency and reducing CO2 emissions.

The scheme is compulsory for organisations which spend £500,000 or more, a year on their energy bills. They will then be expected to pay an additional 10 per cent of their bill to offset carbon emissions or earn a rebate of 10 per cent if they reach reduction targets.

Around 5,000 businesses and public organisations will be included in the first wave of legislation, including councils, universities, hospitals, schools, banks, supermarkets, hotel chains and large business. Another 15,000 firms, who are close to the £500,000 mark, will have to register and disclose their energy bills or face stiff penalties.

Failure to comply with the legislation means an instant fine of £5,000 and £500 per day until a proper report on energy use is submitted to SEPA in Scotland or the Department of the Environment in England.

“A number of recent surveys have shown that around half to two-thirds of businesses are either unaware of their duties or haven’t started doing anything about it,” said William Morris, Managing Director of Energy Solutions Consultants.

“If you add the automatic £5,000 fine each company will get for failing to submit their information on time with the minimum penalty of £50,000 added to energy costs it’s a lot of money. But, there’s an additional fine of £500 a day until the information is submitted to the proper authorities and gathering it all together could take a month or more, that’s at least another £15,000 on top.”

As of April 1 organisations using more than £500,000 worth of gas, electricity, water, oil and other energy sources have to submit a “robust” report detailing their usage of electricity, gas, oil, water and other energy sources dating back to the beginning of 2008.

They will then be expected to purchase carbon allowances at £12 per tonne to off set their emissions and submit a detailed roadmap of how they intend to reduce those emissions over the next few years.

League tables of the best and worst performing companies will be published at the end of each year and, depending on how well they have done, organisations will either get up to 10 per cent of their energy costs back or have to pay 10 per cent more. Those figures are due to rise year on year to plus or negative 50 per cent.

Despite claims of widespread confusion over the scheme a spokesman for the Environment Agency said everybody concerned should know what to do by now.

“A lot of work has been done over the past year, including eight different regional conferences and hosting 50 events, to make sure that people are aware and know what they have to do.” said a spokesperson for The Environment Agency. “People need to register between April and September so they do need to be preparing now. Preparing means identifying who is going to take charge of the CRC work in the company, identifying your energy usage for 2008 and being ready to put that information onto the register and onto registration lists.”