Reaction to extension of the Energy Profits Levy

Commenting on the changes to the Energy Profits Levy, announced in today’s Spring Budget, Claire Angell, Partner and Head of Energy Tax at KPMG in the UK said:

“The extension to the Energy Profits Levy is the latest in a series of changes to the oil and gas windfall tax since it was introduced in May 2022. For an industry which rightfully seeks fiscal stability given the long-term nature of their investments, this makes the UK a more challenging place in which to invest.

“Whilst the political pressure to balance the books in this Budget was clear, this may have unintended consequences and a potential cost to the taxpayer in the medium to long term. Postponing or shelving new development projects and the early cessation of production will reduce future tax revenues. In addition, where decommissioning starts earlier than planned the Government’s liability of up to 75% of those costs will be accelerated. This also has a potential impact on jobs, for a workforce whose skills will be key to the energy transition.”

-ENDS-

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About KPMG UK

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 18,000 partners and staff. The UK firm recorded a revenue of £2.96 billion in the year ended 30 September 2023. 

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.