London Daily

Focus on the big picture.

Shell to  be hit by £1.7bn in UK and EU windfall taxes

Shell to be hit by £1.7bn in UK and EU windfall taxes

It comes after bosses at the London-listed oil giant said in October they had not paid any UK windfall taxes due to heavy investment in the North Sea.
Windfall tax payments are to hit Shell by around $2bn (£1.7bn), the oil and gas company has estimated.

The cost of the UK's energy profits levy and the EU's recently announced solidarity contribution will reach $2bn (£1.7bn) in tax liabilities in the final three months of its financial year, the firm said in a fourth quarter 2022 update.

As a result the company is expected to pay taxes in the UK for the first time since 2017.

It did not specify how much of the tax liability was due to the UK and EU policies, separately.

It told investors on Friday it will face a hit to earnings for the final quarter of 2022 due to the increased UK energy profits levy and additional EU taxes.

The UK windfall tax, announced under Rishi Sunak as chancellor, means oil and gas firms will pay a 25% levy on profits, which will be phased out when energy prices return to normal - but companies will get tax breaks worth 91p for every £1 invested.

Windfall taxes are one-off taxes imposed by government, targeting firms that have benefited from sky-high global energy costs.

Energy costs soared particularly after Russia's invasion of Ukraine as countries rushed to wean themselves off Russian gas.

Most recent figures for Shell show the company reported operating profits of $9.5bn (£8.19bn) in the third quarter of this year. The October numbers were lower than that of the three previous months, but still more than double the figures for the same period in 2021.

Bosses at the London-listed oil giant said at the time that they had not paid any UK windfall taxes due to heavy investment in the North Sea.

The former chief executive of Shell had previously called on the government to tax oil and gas companies in order to protect the poorest people in society from soaring energy costs.

Speaking at the Energy Intelligence Forum in London last year, Ben van Beurden said: "One way or another there needs to be government intervention that somehow results in protecting the poorest.

"That probably may then mean that governments need to tax people in this room to pay for it."

His comment was in reference to companies rather than individuals, a Shell spokesperson later said.

The UK's windfall tax payment is being paid in the final quarter of 2022 as the tax impact is deferred, Shell added.

There will be no impact on adjusted earning for the three months, it said, and will have limited cash impact in the quarter given the expected timing of payments.

The company also warned that prolonged outages at two liquefied natural gas plants in Australia had hit production.

As part of the November autumn statement, Chancellor Jeremy Hunt said the government was to introduce a new temporary 45% levy on electricity generators as part of an aim to raise £14bn in 2023.
Newsletter

Related Articles

London Daily
0:00
0:00
Close
Congo Army Thwarts Attempted Coup Involving Americans and a British Citizen
Ireland's Homeless Gain Voting Rights
Blinken orders crackdown on Israel-Hamas leaks
Julian Assange Faces US Extradition: Key Facts
Jacob Zuma Takes Campaign to ANC Stronghold Soweto
Attempted Assassination of Slovakia PM Robert Fico: Investigation Ongoing
What Happens If an Iranian President Dies in Office?
Spain Recalls Ambassador After Argentina President's Remarks
Rishi Sunak Faces Cabinet Backlash Over Proposed Changes to Foreign Student Visas
Rwanda Denies Entry to Human Rights Researcher
Iranian President Ebrahim Raisi Reportedly Killed in Helicopter Crash
Blue Origin Resumes Space Tourism with 90-Year-Old Ed Dwight
Rishi Sunak and Wife Akshata Murty Wealthier Than King Charles
New Dutch Government Drives Wedge Through EU Liberals
Iranian President Raisi Missing After Helicopter Goes Down
Freemasons and ‘Global War Party’ Accused of Conspiring Against Georgia
Poland Supports Rolls-Royce's Nuclear Power Plant Initiative
European Ports Overflow with Unsold Electric Vehicles
Esprit Files for Bankruptcy in Europe, Putting Hundreds of Jobs at Risk
Chevron Halts North Sea Drilling Amid Rising Tax Burden
Jeremy Hunt Accused of Exaggerating Conservatives' Economic Record
Victoria Atkins Discusses Historical Gender Bias in the NHS
Dublin and Monaghan Bombings 50th Anniversary: Calls for Justice
Rishi Sunak and Akshata Murty’s Wealth Rises to £651 Million
New Caledonia Riots Escalate After French Voting Rights Change
Renters Face Fierce Competition as Listing Times Shrink
Surge in Fake Science: 19 journals shut down due to fraudulent papers from 'paper mills'
Global Birthrates Decline, Raising Economic and Social Concerns
Boeing Faces Possible Prosecution Over 737 MAX Settlement Violation
Prisoner Escapes in France as Two Officers Killed in Van Ambush
German Court Rules AfD Can Be Monitored for Extremism
Jacob Rees-Mogg Criticizes Bank of England’s Inflation Strategy
Prince Harry and Meghan Markle Promote Invictus Games in Nigeria
UK Arms Ban on Israel Would Aid Hamas, Says Cameron
US Regulators Probe Credit Card Reward Schemes
Labour Vows to End Rwanda Deportation Scheme/Scam
Exonerated Andrew Malkinson Faces Hardship Awaiting Compensation
India Poised to Surpass Japan as 4th Largest Economy
UN General Assembly Approves Palestinian Membership Bid
Biden to Impose Tariffs on Chinese Electric Vehicles
Cyberattack Disrupts Major US Healthcare Network
McDonald's Introduces $5 Meal Deal to Attract Customers
Protesters Attempt to Storm Tesla's German Factory
The United Kingdom reports it has emerged from recession
Teens Forming Friendships with AI Chatbots
WhatsApp Rolls Out Major Redesign
Neuralink's First Brain Implant Experiences Issue
Apple Unveils New iPad Pro with M4 Chip, Misleading AI Claims
OpenAI to Announce Google Search Competitor
Apple Apologizes for Controversial iPad Pro Ad Featuring Instrument Destruction
×