The PM made the claim "We can't tax our way to growth" in response to calls for a windfall tax. This is ignoring the fact that, despite paying a nominal tax rate of c. 60%, oil companies actually pay very little tax:
Taxes on their profits are higher - they pay 30% corporation tax on their profits and a supplementary 10% rate on top of that. Other firms currently pay corporation tax at 19%.
But oil and gas firms have been able to reduce the amount of tax they pay by factoring in losses or spending on things like decommissioning North Sea oil platforms.
In recent years, such methods have meant that BP and Shell, for example, have paid almost no tax in the UK.
BP and Shell both received more money back from the UK government than they paid every year from 2015 to 2020 (except 2017, when Shell paid more than it received). Shell also paid a negative amount of tax in 2021 - BP has yet to publish its figures for last year.
What is the windfall tax on oil and gas companies and how much do they pay?
The government raised £2.6bn from the windfall tax in its first year.
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