UK Chancellor extends North Seal oil and gas windfall tax into 2029
(Bloomberg) – UK Chancellor of the Exchequer Jeremy Hunt said he would extend the windfall tax on the profits of oil and gas companies by one year.
The Energy Profits Levy was introduced in May 2022 to raise funds to help people who faced soaring energy bills. The 35% charge will now expire in 2029, instead of March 2028.
The move comes as the chancellor was looking at measures to raise funds for an expected cut to national insurance in his budget on Wednesday. Before the announcement, the Office for Budget Responsibility had expected tax receipts from the oil and gas industry — including corporation and petroleum revenue levies — to raise £6.1 billion ($7.8 billion) in 2023-2024 falling steadily to £2.1 billion by 2028-2029 as production and energy prices decline.
The windfall tax has been heavily criticized by the North Sea oil and gas producers for disproportionately impacting smaller companies. While Russia’s war in Ukraine help push up profits for energy giants such as bp Plc and Shell Plc, the bulk of those earnings come from operations outside of the UK and therefore aren’t taxed in Britain.
