UK oil and gas industry will pay corporation tax rates of 40%
The UK oil and gas industry will pay about £3 billion in extra Corporation Tax because of the global rise in gas prices – without any need for a windfall tax, the sector’s leading trade body has calculated.
OGUK, which represents the nation’s offshore industry, has analysed how the rise in the price of gas, from an average of 24.9p per therm in 2020 to a spot price peak of 454p per therm in 2021, will benefit the UK Treasury – and taxpayers. The oil and gas sector’s profits are already subject to corporation tax rates of 40% – double that of all other sectors – so a rise in gas or oil prices always means a bonanza for the UK Treasury.
However, oil and gas companies know that such taxes are coming and so can budget for them in advance.
The one-off ‘windfall tax’ on UK offshore oil and gas operators, proposed by some opposition politicians would, by contrast, send financial shockwaves through the industry, OGUK has warned.
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