Due to substantial investments in the North Sea, the London-listed oil company stated in October that it has not paid any UK windfall taxes.
Shell has disclosed that windfall tax payments will cost it approximately $2 billion (£1.7 billion).
In the next three months of its fiscal year, the cost of the UK’s energy profits levy and the EU’s recently proposed solidarity payment would surpass $2bn (£1.7bn), the company reported in its fourth quarter 2022 update.
It did not clarify the separate amounts payable to the UK and EU.
It informed investors on Friday that its earnings for the fourth quarter of 2022 will not be affected by the increased UK energy profits levy and new EU taxes.
The London-listed oil giant’s executives
The UK windfall tax, established during Rishi Sunak’s tenure as chancellor, requires oil and gas corporations to pay a 25% fee on earnings. Which will be phased out when energy prices return to normal. In exchange, these enterprises will receive tax savings totaling 91p for every £1 invested.
The government imposes one-time windfall taxes on companies that have benefited from sky-high global energy prices.
After Russia’s invasion of Ukraine, countries sought to wean themselves off Russian gas, driving up energy prices.
Shell’s UK and EU windfall taxes
In the third quarter of this year, Shell reported operating profits of $9.5 billion (£8.19 billion). According to the most recent available data. The October figures were lower than those of the preceding three months. But were still more than double those of the same period in 2021.
The London-listed oil giant’s executives stated at the time that they had not paid any UK windfall taxes due to substantial North Sea investments.
Shell’s top executive had previously urged the government to tax oil and gas firms to shield the weakest members of society from growing energy prices.
Last year at the Energy Intelligence Forum in London, Ben van Beurden stated, “There must be some form of government involvement that results in the protection of the poor.
This may therefore need that governments tax the people in this room to pay for it.
Later, a Shell official clarified that his remark referred to corporations and not individuals.
Shell said that the UK’s windfall tax payment will be made in the fourth quarter of 2022. As the tax impact is deferred.
According to the statement, there will be no impact on the company’s adjusted earnings for the quarter. And given the anticipated timing of payments. There would be minimal cash impact during the period.
The company also warned that output has been affected by protracted outages at two liquefied natural gas installations in Australia.
As part of the government’s plan to raise £14 billion by 2023. Chancellor Jeremy Hunt said in the November autumn statement that a new temporary fee of 45%. Will be imposed on electricity generators.
