{"id":77459,"date":"2023-01-06T12:55:05","date_gmt":"2023-01-06T12:55:05","guid":{"rendered":"https:\/\/tahrir2day.com\/news\/2023\/01\/06\/shell-to-pay-uk-tax-for-first-time-in-five-years\/"},"modified":"2023-01-06T12:55:05","modified_gmt":"2023-01-06T12:55:05","slug":"shell-to-pay-uk-tax-for-first-time-in-five-years","status":"publish","type":"post","link":"https:\/\/tahrir2day.com\/news\/2023\/01\/06\/shell-to-pay-uk-tax-for-first-time-in-five-years\/","title":{"rendered":"Shell to pay UK tax for first time in five years"},"content":{"rendered":"
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Shell has said it will pay tax in the UK for the first time since 2017 after making huge gains around the world last year.<\/b><\/p>\n<\/div>\n

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The energy company said it expects to post around $2 billion (\u00a31.7 billion) in profit in the UK and European Union for the final three months of the year.<\/p>\n<\/div>\n

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Governments have imposed taxes on energy companies to reap some of the massive profits companies have reaped from high oil and gas prices.<\/p>\n<\/div>\n

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Shell will not disclose how much UK tax will ultimately be paid at this time. <\/p>\n<\/div>\n

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It is understood that the number could be lower than forecast as of this writing.<\/p>\n<\/div>\n

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The amount of tax that oil and gas companies pay in the UK can be reduced after accounting for losses, investments in areas such as renewable energy or the decommissioning of oil platforms in the North Sea.<\/p>\n<\/div>\n

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Last year, Shell announced a huge jump in profits, hitting $9.5 billion across its global business between July and September.<\/p>\n<\/div>\n

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At the time, Shell said that because of the large investments in the UK, it had made no profit in the country and therefore did not have to pay taxes.<\/p>\n<\/div>\n

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However, on Friday the company confirmed that it is expected to pay tax in the UK for the first time since 2017.<\/p>\n<\/div>\n

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It comes after the government increased taxes on profits from UK oil and gas production – a policy called the Energy Profits Levy, commonly known as the Windfall Tax – from 25% to 35% in November.<\/p>\n<\/div>\n

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  • What is the windfall tax for oil and gas companies?<\/li>\n<\/ul>\n<\/div>\n<\/div>\n
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    Shell didn’t break down how the $2bn profit drop in the final months of 2022 would be shared between the UK and EU.<\/p>\n<\/div>\n

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    Oil and gas prices started to rise after the end of the Covid lockdowns, but rose sharply after the Russian invasion of Ukraine, leading to record profits for energy companies like Shell and BP in 2022.<\/p>\n<\/div>\n

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    As households were hit by soaring energy bills, the government came under pressure to help, introducing a windfall tax on company profits to fund a program to cap gas and electricity bills.<\/p>\n<\/div>\n

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    Oil and gas companies operating in the North Sea are taxed differently than other companies.<\/p>\n<\/div>\n

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    They pay 30% corporate tax on their profits plus an additional 10% tax rate. In addition, they now pay the windfall tax, bringing their total tax rate up to 75%.<\/p>\n<\/div>\n

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    However, there have been concerns that the directive has flaws. <\/p>\n<\/div>\n

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    Companies have been able to reduce the taxes they pay by accounting for losses or expenses on things like decommissioning oil platforms in the North Sea. This has resulted in companies like BP and Shell paying little or no tax in the UK in recent years.<\/p>\n<\/div>\n

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    The Energy Profits Levy also has a measure allowing energy companies to claim 91p worth of tax savings for every \u00a31 invested in fossil fuel extraction in the UK.<\/p>\n<\/div>\n

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    However, there are also fears that imposing stricter taxes on oil and gas companies could discourage them from investing in UK renewable energy.<\/p>\n<\/div>\n

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    Offshore Energies UK has previously said higher taxes would “undermine” an industry that has created jobs for 200,000 people.<\/p>\n<\/div>\n

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    Despite paying higher taxes, Shell remains on track for record full-year profits for 2022 after reporting $30 billion in profit for the first nine months of last year. <\/p>\n<\/div>\n

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    The company expects to have paid between $4.3 billion and $4.7 billion in taxes worldwide in the last three months of 2022.<\/p>\n<\/div>\n

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    Competitor BP said it will pay $800 million in windfall taxes for 2022.<\/p>\n<\/div>\n

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    On February 2, it will publish its full results for fiscal year 2022.<\/p>\n<\/div>\n

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    Like the UK, the EU has imposed a windfall tax on energy companies, with a 33% levy on fossil fuel company profits and one on revenue from rising electricity costs.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Shell has said it will pay tax in the UK for the first time since 2017 after making huge gains around the world last year. The energy company said it expects to post around $2 billion (\u00a31.7 billion) in profit in the UK and European Union for the final three months of the year. 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