Reuters has reported that the chancellor of the exchequer, Jeremy Hunt, is set to extend the Energy Profit Levy (EPL) by one year to 2029 in tomorrow’s Spring Budget announcement.
The EPL was introduced in May 2022, imposing a 25% windfall tax for oil and gas companies on any “exceptional profits” arising from unexpectedly high oil and gas prices. In the proceeding Autumn Statement, Hunt confirmed that this would increase to 35% from 1 January 2023 and extend to 31 March 2028.
Citing three unidentified sources, the news agency Reuters stated that the tax rate would remain unchanged, but Hunt confirmed he would extend the EPL by one year to 2029 in his annual tax-and-spend speech last Wednesday (28 February).
A HM Treasury spokesperson told Current±: “We keep all taxes under review and do not comment on future tax policy outside of fiscal events.”
Renewable generators are also imposed with a windfall tax at a higher rate than the EPL. The Electricity Generator Levy (EGL) was announced in the 2022 Autumn Statement, imposing a 45% tax on electricity generators – including renewables – on “extraordinary returns from low-carbon UK electricity generation.”
The EGL came into force on 1 January 2023; however, in the 2023 Autumn Statement, Hunt revealed that new renewable generation projects – including extensions to existing projects – approved on or after 22 November 2023 will now be exempt from the EGL.
Current± will be covering the latest news from the 2024 Spring Statement beginning tomorrow (6 Match).
