Large businesses must cut their carbon emissions to avoid being caught out by the government's £1billion-a-year carbon 'stealth' tax. 

The Government imposed this tax on around 4,000 of the UK's largest businesses and public sector bodies as part of the spending review. 

But the move was not announced as part of Chancellor George Osborne's speech to Parliament - instead it was left to a statement by the Department of Energy and Climate Change, and leading regional law firm Wright Hassall thinks that might catch large firms unawares.

Until last week, all companies that used in excess of 6,000MWh (approximately £400,000-£500,000) worth of electricity per year had to sign up to the mandatory Carbon Reduction Commitment scheme.

As part of this scheme, participants' emissions would have been measured between April 2010 and April 2011 to determine how many carbon allowances they would have to buy in 2011.

They would then be entered into a league table system which would allow companies to 'win back' a percentage of the amount they paid based on their performance.

But under this new policy, no money will be returned to participants.

Wright Hassall's business development director Vikki Whittemore said "This new policy amounts to a carbon tax on business which could cost some of the UK's largest companies millions of pounds a year.

"Over the next 18 months organisations will need work hard to reduce emissions in order to limit the amount of carbon allowances that they have to buy from the government.  

"Bars, shops and other businesses that require large amounts of electricity will be the hardest hit." 

Mark Chapman is the managing director of Carbon Statement, a carbon management company that helps companies report and reduce their emissions, from energy waste and business travel.

He said: "First of all, there was real confusion about how to complete the registration for the Carbon Reduction Commitment and then companies were unsure whether they were eligible. Now there is even more confusion.

"In the previous system, participants could have actually made money as a result of a good performance in the CRC 'league table'. But now everybody is effectively being fined, it is just a case of damage limitation from their point of view now.

"This is a shame because all the money that is taken away from the participating businesses as part of this, is money that could have gone into the green economy."

For more information about Wright Hassall, please visit their website here: www.wrighthassall.co.uk