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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

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.
  - makomk 4y ago
    It's not that stupid (and the EU even did the same thing first ... it's just that most of the British media reporting on how much more effective their windfall taxes were downplayed or omitted the fat that most of the money was coming from renewable generation). If the UK ever builds the kind of renewable capacity needed for our climate goals those windfall profits will go pop because they only exist due to electricity prices being based on the most expensive generation needed to meet demand, which is currently natural gas. Once renewables are pushing gas out of the generation mix most of the time that price drops to nearly zero except when the renewables aren't performing well. Basically, the only way for these profits to encourage investment is if renewable companies think they can sandbag the energy transition. (The renewable generation that the Conservative government is pushing for isn't really affected by this because some time ago, they changed how the subsidies were structured into contracts for difference where the companies get a fixed price with the government paying back or receiving the difference from the market price. Profits from generation covered by those CfDs are not subject to any windfall tax.)

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.
- makomk 4y ago
  It's not that stupid (and the EU even did the same thing first ... it's just that most of the British media reporting on how much more effective their windfall taxes were downplayed or omitted the fat that most of the money was coming from renewable generation). If the UK ever builds the kind of renewable capacity needed for our climate goals those windfall profits will go pop because they only exist due to electricity prices being based on the most expensive generation needed to meet demand, which is currently natural gas. Once renewables are pushing gas out of the generation mix most of the time that price drops to nearly zero except when the renewables aren't performing well. Basically, the only way for these profits to encourage investment is if renewable companies think they can sandbag the energy transition. (The renewable generation that the Conservative government is pushing for isn't really affected by this because some time ago, they changed how the subsidies were structured into contracts for difference where the companies get a fixed price with the government paying back or receiving the difference from the market price. Profits from generation covered by those CfDs are not subject to any windfall tax.)