Connect with us

Hi, what are you looking for?

Editor’s Pick

Shell to pay UK tax for first time in five years

Shell has said it will pay tax in the UK for the first time since 2017 after making huge global profits last year.

The energy firm said it expected to “take a hit” of around $2bn (£1.7bn) on profits in the UK and the European Union in final three months the year.

Governments have imposed taxes on energy companies to capture some of the massive profits firms have made through high oil and gas prices.

Shell will not disclose at present how much UK tax it will finally pay.

It is understood the figure could be lower than forecast at this stage.

The amount of tax oil and gas companies pay in the UK can be reduced after factoring in losses, investment in areas such as renewable energy or decommissioning North Sea oil platforms.

Last year, Shell revealed a huge jump in profit, which reached $9.5bn across its global business between July and September.

At the time, Shell said that because it had made large investments in the UK it had not made a profit in the country and was therefore not required to pay taxes.

But on Friday, the company confirmed that it does expect to pay some tax in the UK for the first time since 2017.

It comes after the government increased tax on the profits made from extracting UK oil and gas – a policy called the Energy Profits Levy which is commonly referred to as the windfall tax – from 25% to 35% in November.

Shell did not break down how the $2bn hit to its earnings in the final months of 2022 would be split between the UK and the EU.

Oil and gas prices began to rise after the end of Covid lockdowns but surged after Russia’s invasion of Ukraine, resulting in bumper profits for energy companies including the likes of Shell and BP in 2022.

With households being hit by soaring energy bills, the government came under pressure to help and introduced a windfall tax on the profits of firms to help fund a scheme to restrict gas and electricity bills.

Oil and gas firms operating in the North Sea are taxed differently to other companies.

They pay 30% corporation tax on their profits as well as a supplementary 10% rate. On top of that, they now pay the windfall tax taking their total tax rate to 75%.

However, there has been concerns there are flaws in the policy.

Firms have been able to reduce the amount of tax they pay by factoring in losses or spending on things like decommissioning North Sea oil platforms. It has meant that in recent years, companies such as BP and Shell have paid little or no tax in the UK.

The Energy Profits Levy also has a measure that allows energy companies to apply for tax savings worth 91p of every £1 invested in fossil fuel extraction in the UK.

However there are also fears that introducing tougher taxes on oil and gas companies could put them off investing in UK renewable energy.

Offshore Energies UK has previously said higher taxes would “undermine” an industry which generated jobs for 200,000 people.

Despite having to pay higher taxes, Shell remains on track for bumper annual profits for 2022 after reporting profit of $30bn for the first nine months of last year.

The company said it expects to have paid between $4.3bn and $4.7bn in global taxes over the final three months of 2022.

Rival BP said it would pay $800m in windfall tax for 2022.

It is due to publish its full results for the 2022 financial year on 2 February.

Like the UK, the EU has imposed a windfall tax on energy companies, with a 33% levy on fossil fuel firms’ profits and also one on the revenues made from rising electricity costs.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!


Editor’s Pick

<?xml encoding=”utf-8″ ??> The exodus of workers from the jobs market over the pandemic has weakened prospects for Britain’s economic growth, the governor of...

Editor’s Pick

<?xml encoding=”utf-8″ ??> Will Polston, talks to Business Matters about how helping ambitious owners to maximise their potential has resulted in him becoming a finalist...


Elon Musk talks about his company’s Starlink project at the Mobile World Congress, Barcelona, Spain, June 30, 2021. — BRISA PALOMAR / PACIFIC PRESS/SIPA...


PHILSTAR FILE PHOTO The National Economic and Development Authority (NEDA) has approved seven “high-impact” projects, ranging from agriculture to transportation, the agency’s top official...


Television (TV) advertising is shifting toward addressable TV, a service that allows advertisers to show different ads to different audiences watching the same program,...

Editor’s Pick

<?xml encoding=”utf-8″ ??> Wayne Janse Van Rensburg, Chief Executive of education company Learndirect talks to Business Matters about the inspiration behind their business, which...

You May Also Like


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.