Shell paid zero windfall tax in UK despite record global profits

Shell has paid zero windfall tax in the UK despite making record global profits of nearly $30bn (£26bn) so far this year, prompting calls for the government to overhaul a scheme that was supposed to raise billions to tackle the cost of living crisis. The UK-headquartered oil company said it had not paid the levy and did not expect to throughout 2022, because its British corporate entity did not make any profits during the quarter, in part, because of heavy spending on drilling more oil in the North Sea. Rishi Sunak, who took office as prime minister on Tuesday, introduced the energy profits levy in May when he was chancellor to help pay for support for British households hit by the cost of living crisis.

The government had expected to raise £5bn from the energy profits levy, but some analysts have warned that extensive use of tax reliefs could lead to much less being recouped. Labour called for a rethink, saying the UK needed a “proper windfall tax”, while the Trades Union Congress described Shell’s profits as “obscene”. Sunak introduced the scheme after coming under intense political pressure, acknowledging the sector was “making extraordinary profits, not as the result of recent changes to risk-taking or innovation or efficiency, but as the result of surging global commodity prices driven in part by Russia’s war” in Ukraine.

However, Sunak’s scheme also introduced extended tax breaks for investment in extraction in North Sea oilfields. For every £1 businesses spent in the North Sea, they could reduce their taxes by 91p. It also does not cover profits made from forecourts, from refining or from trading shipments of oil and gas – areas where the company has made huge sums this year.

Ed Miliband, the shadow secretary for climate change and net zero, called for the windfall tax to be strengthened and criticised “ludicrous tax breaks” for oil companies. “The fact that Shell recorded the second highest quarterly profits in the company’s history is further proof that we need a proper windfall tax to make the energy companies pay their fair share,” he said. Frances O’Grady, the TUC general secretary, said the profits were “obscene”, adding: “The government has run out of excuses,.

It must impose a higher windfall tax on oil and gas companies. The likes of Shell are treating families like cash machines. ” Shell announced on Thursday that its global profits hit nearly $9.

5bn between July and September, more than double the amount it made during the same period a year earlier. It said it would increase its payments to shareholders. The oil company continued to benefit from soaring energy prices prompted by Russia’s invasion of Ukraine, with a bumper third quarter after a record $11.

5bn profit earned between April and June. Shell’s total profits for the year so far were about $30bn, a record for the first three-quarters. The FTSE 100 company’s third quarter earnings were higher than the $9bn forecast by analysts, and were more than double the $4.

1bn reported in the same quarter in 2021. Sign up to Business Today Free daily newsletter Get set for the working day – we’ll point you to the all the business news and analysis you need every morning Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy .

We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. Cost of living crisis: Stop the Squeeze calls for wealthiest to ‘pay proper share’ of tax Read more Shell’s finance chief, Sinead Gorman, confirmed the company did not expect to pay anything under the energy profits levy this year. “Heavy capex [capital expenditure] has meant that we haven’t had extra tax coming through in this quarter yet,” she said.

“I do expect to see that extra tax … to happen quite early in the first quarter of 2023, but we’ll see what plays out with prices as well. ” Gorman added: “We simply are investing more heavily than we have, and therefore we don’t have profits which we can be taxed against. ” The results came as the Anglo-Dutch firm announced plans to buy $4bn of stock over the next three months in an extension of its share repurchasing programme.

That took announced payouts for shareholders this year to $26bn – far in excess of Shell’s investment in renewable energy. Shell and other big oil and gas companies have been enjoying soaring profits and booming trade since the Kremlin’s invasion of Ukraine in late February pushed oil and gas prices higher. The French oil group TotalEnergies on Thursday reported third-quarter profits of $9.

9bn, double the amount for the same period last year. However, oil prices have fallen from their highs of $120 a barrel of Brent crude in June to about $95, while natural gas prices have also dropped and are about 70% lower than their peak in late August. The UK Treasury was approached for comment.

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