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Windfall tax on North Sea oil and gas operators could raise £2bn, says Labour

The UK government could raise more than £2bn from a windfall tax on North Sea oil and gas operators to offset the impact of soaring energy prices on UK households. Acording to a study by the Labour party, the one-off levy would raise £1.95bn in revenues for the Treasury, more than the £1.2bn the party forecast in January. Oil and gas profits in the North Sea are taxed at 30% corporation tax plus a 10% surcharge. Labour has proposed raising the combined rate from the current 40% to 50%. Labour’s calculations were based on new forecasts released by the Office for Budget Responsibility (OBR), released alongside the Spring Statement in March, which took account of price surges in the week following Russia’s invasion of Ukraine. In March, the OBR upped its forecasts for UK oil and gas tax receipts to £13bn for the year to April 2023 from £3.1bn the previous year, the highest return from the North Sea since 2010-11, when tax receipts totalled £9.6bn, reported The Guardian. Analysts believe the rise in energy prices since March could increase the windfall tax income to more than £2bn, the Guardian said. The debate about a windfall tax on oil companies has emerged as firms like BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) are seeing a surge in profits thanks to the high energy price.  Tesco PLC (LSE:TSCO) chairman John Allan has said there is an “overwhelming case” for a windfall tax. But Prime Minister Boris Johnson has so far refused to support the one-off levy, contending it would hinder foreign investment in Britain’s energy sector.