RE: Windfall tax - what it means for BP17 Nov 2022 16:31
Looking at graph of sp today appears to confirm markets think there were no surprises today.
You really cannot tell when announcement was made.
Suspect all you are seeing is slight drops in sp being pulled back up by buybacks.
Number of trades appears very normal also.
Very much a case of nothing to see here.
Someone on one of the other oil boards has said super deduction has actually been raised marginally.But I have not confirmed this.
This is what they posted
How will the Energy Profit Levy’s investment allowance change?
The government has always been clear that it wants to see the oil and gas sector reinvest its profits to support the economy, jobs, and the UK’s energy security.
The energy profits levy included a ‘super-deduction’ style relief which aimed to encourage companies to invest in UK oil and gas extraction, putting more UK gas on the grid for longer, supporting jobs and the economy and bolstering the future energy security of the UK.
This 80% Investment Allowance meant businesses would get a £91.25 tax saving for every £100 they invest – providing them with an additional incentive to invest. This nearly doubled the tax relief available and means the more investment a firm makes, the less tax they will pay.
Under the 35% levy rate, the government is reducing the rate of the allowance to 29% which, due to the higher rate, will broadly maintain the existing cash value of the allowance.
This means business will be able to claim £91.40 in tax relief for every £100 invested rather than the previous £91.25
We also recognise the crucial role oil and gas firms in helping us to achieve our ambitious net zero targets by investing in world leading renewable infrastructure and green energy products.
The government has always been clear that it wants to see the sector reinvest its profits to further support Net Zero, domestic jobs and the UK’s energy security. The Net Zero Strategy also recognised that remaining oil and gas installations will use low carbon power, with the sector currently working towards reducing emissions by 25% in 2027 and by 50% in 2030.
To encourage this, decarbonisation expenditure such as modifying existing installations to use power from offshore windfarms, installing bespoke wind turbines to power the installation or running electricity cables to the installation from shore will continue to qualify for the current investment allowance rate of 80%.
This means from the 1st of January 2023, a company spending £100 on upstream decarbonisation will now be able to deduct £109.25p when calculating its levy profits.
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