07/07/2022

North Sea oil and gas companies, which already benefit from huge tax breaks, could apply new rules to reduce their payments under a new windfall tax announced by Rishi Sunak as part of his £15 billion living expenses package, according to a think tank. she has.

The chancellor is risking a fraction of $5 billion from the Common Wealth Center.

The warning comes after the Liberal Democrats said the chancellor’s refusal until last week to impose an unexpected tax meant he had to pay £3 billion.

Kristen Jardine, a Treasury spokeswoman for the Liberal Democrats, said Sunak’s 25 percent tax in 2011. An hour “on the profits of oil and gas companies will allow them to ‘business as usual’ and transfer most of their profits to shareholders.”

“It’s bad enough that the chancellor waited until the eleventh hour to tax big oil and gas companies when the Liberal Democrats first called for an unexpected tax last October. Now he doesn’t seem to even remember what he said. That’s more levy than a dividend tax. Surprise “.

She accused the chancellor of “making room for huge companies that are turning the crisis into a murder.”

Rishi Sunak has announced Windfall tax as part of a £15 billion cost of living package. Photo: Peter Nichols/Reuters

Oil giants BP and Shell are on track to make a combined profit of around £40 billion this year from soaring petrol and gas prices.

Jardine added: “He has chosen to leave billions on the table that could have been used to provide support while instead criticizing families for raising unfair taxes. It shows how little contact he and the Conservatives have with people who are suffering.”

Common Wealth said North Sea oil and gas companies are currently benefiting from a range of subsidies to help cover the cost of extracting new wells and decommissioning them.

She cited research with New Economics that found the government could give UK businesses a water tax break of around £3.1 billion in 2019-20 and £2.5 billion in 2020 on share buyback programmes, As research centers said. .

The Treasury has not calculated how much it could lose from the additional £5 billion tax if North Sea operators apply for additional investment appropriations over the next three years.

Labor said the lack of consultations with industry ahead of Sunak’s statement on Thursday showed the plans were urgent and meant to distract attention from the party’s scandal.

In January, shadow chancellor Rachel Reeves called for a one-year surcharge of 10% on North Sea profits to raise between £2 billion and £3 billion. Jardine had proposed a 25 percent tax last October, in line with the chancellor’s plan, but without the tax credits the Treasury Department offered.