09 Feb 2024

Green Investment Pledge

The Labour Party announced on 8 February that they are dropping their pledge to spend £28bn per year on “green investment”. As part of the briefings around this announcement, the following comments on the windfall tax were reported in the Press. Labour will introduce a proper windfall tax on the excess profits of oil and gas companies, o we can invest in the clean power we need to cut bills for families. Labour will fix the holes in the Energy […]


22 Nov 2023

Autumn Statement 2023

The Chancellor delivered the Autumn Statement 2023 today.  We summarise below the announcements that were made on the specific rules that apply to UK upstream oil and gas companies. Energy Security Investment Mechanism (‘ESIM’) The Government announced today that the ESIM, through which the Energy Profits Levy (EPL) will be terminated early in the event oil and gas prices fall below a threshold, will be legislated.  It also clarified how those threshold prices would be measured. The ESIM was announced […]


10 Jul 2023

Scope of the ring-fence decision published

Court of Appeal decision published in the Royal Bank of Canada case In March 2022. we published a newsletter on the Upper Tribunal (‘UT’) decision that considered whether an oil and gas “royalty” interest held by a non-UK resident (Royal Bank of Canada (‘RBC’)) gave rise to ring-fence income and whether the relevant treaty allowed HMRC to tax the income. The UT decided in favour of HMRC, and RBC was held to be liable to UK ring fence corporation tax […]


04 Apr 2023

Transfer Pricing Documentation – requirement for larger businesses for accounting periods commencing on or after 1 April 2023

UK Upstream Oil and Gas Tax

Companies that are members of multinational groups (“MNE”) with annual consolidated revenue of €750 million or more will be required to maintain transfer pricing records. The records will be specified under a Regulation that has yet to be published but HMRC have already announced that it will require records that conform to those specified in the OECD requirements for Local and Master files. The draft Regulation contained an exception for transactions where both parties are subject to UK CT unless […]


31 Mar 2023

Decarbonisation Allowance

As reported in our Newsletter of 15 March, the increase in the rate of Energy Profits Levy (‘EPL’) to 35% is accompanied by a new decarbonisation allowance to reduce profits charged to EPL.  The allowance will be generated at a rate of 80% of the qualifying expenditure as opposed to the 29% rate that applies to other investment expenditure and the Finance Bill  contains the draft legislation. In all cases the expenditure that generates the allowance must be capital in […]


15 Mar 2023

Spring Budget 2023

The Chancellor delivered Spring Budget 2023 today.  There were two announcements on the specific rules that apply to UK upstream oil and gas companies. Decarbonisation allowance The increase in the rate of Energy Profits Levy (‘EPL’) to 35% announced in the Autumn Statement 2022 was accompanied by a new decarbonisation allowance.  This allowance would be more generous than the allowance applied to other investment expenditure. Where expenditure qualifies an additional 80% of that expenditure can be deducted from profits that […]


17 Nov 2022

Autumn Statement 2022

The Chancellor delivered the Autumn Statement 2022 today. As expected the tax rate applicable to UK oil and gas profits is to be increased.  The headline rate of corporation tax for UK oil and gas upstream profits is now 75%.   He also announced a new tax to be levied on some electricity generators at a rate of 45%. Energy (Oil and Gas) Profits Levy (‘EPL’) Increased rate of EPL The rate of EPL is to be increased from 25% to […]


15 Nov 2022

Oil and Gas capital allowances relief- lessons from a recent case

The judgement in a recent case (Gunfleet Sands Ltd and others v HMRC [2022] UKFTT 35 (TC)), concerning the costs of evaluation and design of a potential windfarm development, provides some current judicial thinking on what costs may qualify for plant and machinery capital allowances (PMAs). For large capital intensive projects such as oil and gas projects, as well as alternative energy projects, the entitlement to tax relief for the costs of project scoping, planning, and evaluation has been an […]


23 Sep 2022

Mini Budget 23 September 2022: No change for oil and gas sector

Today’s announcements by the Chancellor Kwasi Kwarteng did not contain any changes to the current corporate taxation rules specifically aimed at the oil and gas sector. In particular, there was no announcement of a change to the energy (oil and gas) profits levy enacted in July this year. CW Energy continues to monitor the implications of this levy, working with clients to understand its impact. For industry generally, as widely predicted the non-ring fence corporation tax rate will not be […]


15 Sep 2022

CWE under new ownership

After nearly five years of being part of the Ince group, Phil Greatrex and Paul Rogerson have reacquired the CWE business from Ince. There will be no changes to the running of the client-facing part of the business. All of the partners and staff of CWE will carry on in their original capacities and can be contacted using their existing details as set out on our website. We are now looking forward to developing the business as an independent […]