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>Oil and gas firms also pay 30% corporation tax on their profits as well as a supplementary 10% rate. Along with the new windfall tax, that takes their total ta

>Oil and gas firms also pay 30% corporation tax on their profits as well as a supplementary 10% rate. Along with the new windfall tax, that takes their total tax rate to 75%. So that's a huge win for the Exchequer...

rmccue 4y ago
On UK profits only: > BP said its UK business, which accounts for less than 10% of its global profits, will pay $2.2bn in tax for 2022, including $700m due to the Energy Profits Levy.
- LatteLazy 4y ago
  I am not sure you can tell a company to pay 75% of it's profits from other countries in tax. If that other country expects just 30%, that is a 105% tax rate...
  - blitzar 4y ago
    > I am not sure you can tell a company to pay 75% of it's profits from other countries in tax. Of course you can, they already pay tax on offshore earnings. Some countries even make their citizens pay tax on global earnings even when they dont live, work, vote or visit their country (looking at you USA) > If that other country expects just 30%, that is a 105% tax rate... Double taxation agreements exist. Where they dont the tax paid would be a cost .. so 75% of the after tax amount from the other country - i.e 82.5%
    - LatteLazy 4y ago
      A Double taxation agreement means one or both country agrees to forgo some or all the tax they would otherwise demand. That's why the US technically taxes it's citizens working abroad, but in reality collects much less than the official rate. So if we do that for companies, then you are definitely not going to get 75% in the UK and 30% locally...
scott_w 4y ago
As commentators point out, they've been very busy shifting money to reduce their tax bill. Also, 30 + 10 + 25 != 75, so I don't know why the BBC keep repeating this number.
- blitzar 4y ago
  Also ... within the levy, a new ‘super-deduction’ style relief is being introduced to encourage firms to invest in oil and gas extraction in the UK. The new 80% Investment Allowance will mean businesses will overall get a 91p tax saving for every £1 they invest – providing them with an additional, immediate incentive to invest. This nearly doubles the tax relief available and means the more investment a firm makes, the less tax they will pay. Paying the windfall tax means that they had ~£0 of actual "investment" in the UK (or paid an effectively voluntary amount for goodwill purposes).
  - scott_w 4y ago
    I didn't even know that! What still stuns me is the absolute genius in applying this to renewable energy suppliers, too. A Conservative government states its belief that low tax encourages investment so they... increase taxes on renewable providers.
    - blitzar 4y ago
      Well ... my energy supplier - 100% green electricity saw fit to 5x my electricity bill. Wind / solar installed in say 2016 and expected yield X or pay-down the capital investment in Y years have seen massive windfalls and capital effective paid off thanks to the increase in prices. If anything the tax / investment rebate should tax the finished and sold projects who have had massive windfalls while not impacting the companies or projects that are still investing.
      - scott_w 4y ago
        I think there’s also a separate issue with energy prices set at the most expensive one. Honestly, I’m not sure why this is still the case in this climate.

rmccue 4y ago

On UK profits only: > BP said its UK business, which accounts for less than 10% of its global profits, will pay $2.2bn in tax for 2022, including $700m due to the Energy Profits Levy.

LatteLazy 4y ago
I am not sure you can tell a company to pay 75% of it's profits from other countries in tax. If that other country expects just 30%, that is a 105% tax rate...
- blitzar 4y ago
  > I am not sure you can tell a company to pay 75% of it's profits from other countries in tax. Of course you can, they already pay tax on offshore earnings. Some countries even make their citizens pay tax on global earnings even when they dont live, work, vote or visit their country (looking at you USA) > If that other country expects just 30%, that is a 105% tax rate... Double taxation agreements exist. Where they dont the tax paid would be a cost .. so 75% of the after tax amount from the other country - i.e 82.5%
  - LatteLazy 4y ago
    A Double taxation agreement means one or both country agrees to forgo some or all the tax they would otherwise demand. That's why the US technically taxes it's citizens working abroad, but in reality collects much less than the official rate. So if we do that for companies, then you are definitely not going to get 75% in the UK and 30% locally...

scott_w 4y ago

As commentators point out, they've been very busy shifting money to reduce their tax bill. Also, 30 + 10 + 25 != 75, so I don't know why the BBC keep repeating this number.

blitzar 4y ago
Also ... within the levy, a new ‘super-deduction’ style relief is being introduced to encourage firms to invest in oil and gas extraction in the UK. The new 80% Investment Allowance will mean businesses will overall get a 91p tax saving for every £1 they invest – providing them with an additional, immediate incentive to invest. This nearly doubles the tax relief available and means the more investment a firm makes, the less tax they will pay. Paying the windfall tax means that they had ~£0 of actual "investment" in the UK (or paid an effectively voluntary amount for goodwill purposes).
- scott_w 4y ago
  I didn't even know that! What still stuns me is the absolute genius in applying this to renewable energy suppliers, too. A Conservative government states its belief that low tax encourages investment so they... increase taxes on renewable providers.
  - blitzar 4y ago
    Well ... my energy supplier - 100% green electricity saw fit to 5x my electricity bill. Wind / solar installed in say 2016 and expected yield X or pay-down the capital investment in Y years have seen massive windfalls and capital effective paid off thanks to the increase in prices. If anything the tax / investment rebate should tax the finished and sold projects who have had massive windfalls while not impacting the companies or projects that are still investing.
    - scott_w 4y ago
      I think there’s also a separate issue with energy prices set at the most expensive one. Honestly, I’m not sure why this is still the case in this climate.