"The energy profits levy (EPL), introduced in 2022 under Rishi Sunak amid soaring global energy prices, currently imposes an effective tax rate of 78 per cent on North Sea operators. The Treasury is now considering whether to end the levy early, over growing fears it is stifling capital investment and threatening the UK's domestic energy output. Sources close to the discussions said officials have been consulting with major North Sea operators to gauge how much they would reinvest if the tax were removed."
"Industry body Offshore Energies UK (OEUK) has warned that the sector is shedding 1,000 jobs a month as a direct consequence of the levy, with investment and production both falling faster than expected. The group has urged the Chancellor to replace the tax with a more stable, long-term fiscal framework, arguing that uncertainty over the levy is driving companies to shift their investment abroad."
Chancellor Rachel Reeves is considering ending the 78% energy profits levy on North Sea oil and gas producers to boost investment and revive growth. The EPL was introduced in 2022 and currently imposes an effective 78% tax rate. Treasury officials have consulted major operators to gauge potential reinvestment if the levy is removed. Industry group OEUK reports the sector is losing about 1,000 jobs monthly and warns that investment and production are falling. The OBR estimated raising the levy would add about £1bn but also forecast a 25% drop in investment and up to a 9.2% fall in output. Oil and gas revenues have come in lower than forecast, reducing EPL returns.
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