Rishi Sunak announces windfall tax to help fund support measures

The Chancellor last week announced a £15bn package of support for UK households as inflation hits a 40-year high and energy bills soar. Measures, including a £400 discount on energy bills for all households and a £650 one-off payment for the poorest, will be partly funded by a windfall tax on oil and gas companies. The 25% tax on “excess profits” will raise around £5bn of the total package. The North Sea oil and gas industry was not impressed by Rishi Sunak’s U-turn on the one-off levy on energy company profits. BP described the announcement as a multiyear proposal, not a one-off tax, which will result in the company having to re-evaluate its investment plans. Shell said proposed tax relief on investments was “a critical principle in the new levy” but stressed the “importance of a stable environment for long-term investment”. The Chancellor said companies that reinvested their profits in British oil and gas exploration would get back 90% of the new tax in relief. Defending the decision to introduce a windfall tax, the Chancellor insisted the Government had a responsibility to help those hardest hit by the cost-of-living crisis.

 

 

Financial Times

 

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