For the latest New Developments, see ND.2686, ND.2751 and ND.2829.
A windfall tax (the energy (oil and gas) profits levy, or more simply, the levy or EPL) applies to levy profits (broadly, the ring fence profits calculated based on a number of assumptions) in addition to corporation tax and the supplementary charge for accounting periods beginning on or after 26 May 2022 and ending on or before 31 March 20301. The rate is set at 38% of the levy profits for accounting periods beginning on or after 1 November 20242, 35% for accounting periods beginning on or after 1 January 2023 but before 1 November 2024 and 25% for accounting periods beginning on or before 31 December 2022. Straddle periods are treated as two separate accounting periods for levy purposes (see below for details).
On 9 June 2023, the Treasury announced an Energy Security Investment Mechanism (ESIM), which will end the EPL earlier than 31 March 2030 if oil and gas prices reduce to historically normal levels before that date3.
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