UK Imposes 25% Windfall Profits Tax on Energy to Benefit Households


Welcome to the 1970’s. It is called redistribution of wealth. Coming to our town soon.

Jimmy Carter did this too; same name, same product even:  Windfall Profits Tax (1980) on oil. 

The price of the commodity goes up, so the selling price goes up too.   If the selling price goes up “too much”, there are criminal statutes re price-gouging. 

And of course there will be funds for “domestic energy services” which simply means shuffling the money about.

UK Slaps Energy Companies With New 25% Tax

The Prime Minister has said that a windfall tax on energy companies would discourage them to invest in infrastructure that may keep fuel costs low in the future.

 

Here we go: I will start with the bottom line.

Offshore Energies UK, which represents the offshore oil and gas industry, said the tax would burden firms with “sudden new costs,” which would “disrupt planning and investment and, above all, undermine investor confidence.”

The UK government has announced a temporary windfall tax on oil and gas giants to fund a relief package for households struggling with rising bills.

…..

Millions of households will receive a £400 ($504) discount off their energy bills.

Around 8 million of the lowest income households will be sent a one-off payment of £650, and pensioners will receive a one-off £300 payment.

To help fund the package, which will cost £15 billion ($19 billion), the government will introduce a 25 percent profit levy on oil and gas giants, which it expects to generate £5 billion ($6.3 billion) in tax revenues.

Addressing the House of Commons on May 26, Sunak acknowledged that high inflation is causing “acute distress” for people in the country, telling MPs, “I know they are worried, I know people are struggling.”

He said the government “will not sit idly by while there is a risk that some in our country might be set so far back they might never recover.”

Sunak said the oil and gas sector is making “extraordinary profits” not as the result of innovation or efficiency, but as the result of “surging global commodity prices driven in part by Russia’s war.”

“For that reason I am sympathetic to the argument to tax those profits fairly,” he said.

Meanwhile, the chancellor said he is introducing a “new investment allowance” to incentivise energy firms to reinvest their profits in developing domestic energy sources.

Sunak stopped short of also slapping the new levy on electricity generators, although he said the Treasury was evaluating the scale of the profits being made in the industry and what steps could be taken.

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13 Responses to “UK Imposes 25% Windfall Profits Tax on Energy to Benefit Households”

  1. Bill Heffner Says:

    Sort of like Obamacare which, in order to reduce the cost of health care, imposed a 10% tax on medical devices such as walkers, crutches and the like.

    Liked by 1 person

  2. dave drake Says:

    “To help fund the package, which will cost £15 billion ($19 billion), the government will introduce a 25 percent profit levy on oil and gas giants, which it expects to generate £5 billion ($6.3 billion) in tax revenues.”

    This isn’t a good idea from a financial point, or am I missing “common core math” that makes this workable? 🙂

    Liked by 3 people

  3. markone1blog Says:

    “Give ’em crumbs to be happy with” — isn’t that what the socialists over the pond are doing?

    Hopefully, Joe won’t see this and catch on. Too many are already happy with being on the dole.

    Liked by 4 people

  4. Layla Elizabeth Kanas-Gonzalez Says:

    No better at this point than the US! smh 🤦‍♀️

    Liked by 5 people

  5. Ed Bonderenka Says:

    You will own nothing and you will be happy.

    Liked by 6 people

  6. peter3nj Says:

    More welcome news of course. How long before the dolts in our congress play follow the leader upon seeing that the Brits will get away with imposing a 25% tax on oil companies. What’s another coupla hundred billion for congress to spread around to their pals over here and our enemies over there-wherever over there is at any given time.” Bend over Amerika cuz once again you’re about to be screwed at the pump without benefit of a friction modifier.

    Liked by 3 people

    • bunkerville Says:

      Their companies are part of various energy stock funds here, so many will take a hit here as well. Just what we need for our markets. This must make the WH gang salivate.

      Liked by 4 people

      • peter3nj Says:

        Ya know this geriatric, head of the vacuous mind crew, faux Presidente and his criminal party may just prevail this November. Firstly the Chicoms get him elected and he has has Putin to blame for just about all his f__kups from gas prices at the pump to shortages on the grocery shelves and now this tragedy in Texas has given MCConnell cover to join the democrats in weakening even more the second amendment as well as giving the fence sitting voters on the left and the independents cover to vote democrat. FOX will continue to push the false narrative that a red sunami is coming in November simply even while the republicans and RINO’s remain at odds because its good for ratings. If a change was coming there would be protests and rioting over the “illegal sunami” commencing next week. The silence is deafening.

        Liked by 3 people


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