Windfall tax

[superfeathers]

Rishi did a great job in setting the terms
Of the windfall tax then

https://www.newhamrecorder.co.uk/news/national/23081675.shell-yet-pay-extra-windfall-tax-bosses-confirm/

[Feedback]

Re: Windfall tax

seems ok to me. As Az will tell you, one of the purposes of the tax system is to reward or punish behaviours. The UK has to improve it productivity and you do that from investment. The current tax system is favourable towards investment so this is very much a good thing.

[superfeathers]

Re: Windfall tax

seems ok to me. As Az will tell you, one of the purposes of the tax system is to reward or punish behaviours. The UK has to improve it productivity and you do that from investment. The current tax system is favourable towards investment so this is very much a good thing.

Doesn't make a lot of sense to me. A windfall tax that the government were virtually forced into, to help plug the black hole in the finances, and Shell haven't paid a penny.

I get that investment is good, but to have paid zero extra tax doesn't seem right.

[Feedback]

Re: Windfall tax

Doesn't make a lot of sense to me. A windfall tax that the government were virtually forced into, to help plug the black hole in the finances, and Shell haven't paid a penny.

I get that investment is good, but to have paid zero extra tax doesn't seem right.

So if all profits are reinvested, what is there to be taxed?

[superfeathers]

Re: Windfall tax

So if all profits are reinvested, what is there to be taxed?

Precisely, maybe they could have led with a cap on what could be reinvested, as with the model they've gone with, Shell have paid nothing.

I'm not saying I have the answer, but surely a windfall tax that raises absolutely nothing from one of the main contributors is flawed.

[JamesWales]

Re: Windfall tax

Precisely, maybe they could have led with a cap on what could be reinvested, as with the model they've gone with, Shell have paid nothing.

I'm not saying I have the answer, but surely a windfall tax that raises absolutely nothing from one of the main contributors is flawed.

The whole argument against windfall taxes is that in practice you don't actually see the sums you want because companies will find one way or other to limit it.

In this case though, I agree, it's pointless. I guess the UK economy hopefully saw investment it otherwise wouldn't have but still. The point was to help pay for the support packages.

[Feedback]

Re: Windfall tax

this thread shows that the general public are just not aware of how petrochems are taxed in the UK. They already pay an effective rate of around 60% corporation rate on their UK profits - this is before the windfall. Most other companies only pay 19%.

The UK has had a productivity puzzle for many years, and economists will tell you that investment is one way to drive up growth by improving productivity. In this respect successive governments have used the tax system to encourage investment rather than distribute as profits. It seems to be that if Shell are reinvesting profits rather than paying tax and distributions, these funds are being spent directly into the UK economy, increasing the velocity of money, and improving the economy in a way that just wouldn't happen if the profits were taxed and spent via the public sector.

[MOZZER2]

Re: Windfall tax

Drycleaning would you have a link / evidence where they pay 60% corporation tax in the UK ?

If true didn't know that

[superfeathers]

Re: Windfall tax

this thread shows that the general public are just not aware of how petrochems are taxed in the UK. They already pay an effective rate of around 60% corporation rate on their UK profits - this is before the windfall. Most other companies only pay 19%.

The UK has had a productivity puzzle for many years, and economists will tell you that investment is one way to drive up growth by improving productivity. In this respect successive governments have used the tax system to encourage investment rather than distribute as profits. It seems to be that if Shell are reinvesting profits rather than paying tax and distributions, these funds are being spent directly into the UK economy, increasing the velocity of money, and improving the economy in a way that just wouldn't happen if the profits were taxed and spent via the public sector.

If that’s correct then It’s news to me that they pay 60% before the windfall tax yes. It doesn’t change what I was asking though, ie whether a tax that’s intended to fund energy relief that gets nothing from Shell is badly thought out

[Eric Cartman]

Re: Windfall tax

I have no real problem with this so long as

- the investment is in something that is a priority for the UK, or at very least isn't at odds with our priorities
- jobs created by the investment predominantly go to people from the UK and are new.

If the above two criteria aren't met then the investment has very little benefit to the UK.

[Feedback]

Re: Windfall tax

I have no real problem with this so long as

- the investment is in something that is a priority for the UK, or at very least isn't at odds with our priorities
- jobs created by the investment predominantly go to people from the UK and are new.

If the above two criteria aren't met then the investment has very little benefit to the UK.

For relief to be allowable, it has to be UK investment in green energy

[Dorcus]

Re: Windfall tax

this thread shows that the general public are just not aware of how petrochems are taxed in the UK. They already pay an effective rate of around 60% corporation rate on their UK profits - this is before the windfall. Most other companies only pay 19%.

The UK has had a productivity puzzle for many years, and economists will tell you that investment is one way to drive up growth by improving productivity. In this respect successive governments have used the tax system to encourage investment rather than distribute as profits. It seems to be that if Shell are reinvesting profits rather than paying tax and distributions, these funds are being spent directly into the UK economy, increasing the velocity of money, and improving the economy in a way that just wouldn't happen if the profits were taxed and spent via the public sector.

That may well be a sound economic argument but of course there are other dimensions to this issue too, particularly political and sociological ones.

The attempt to stimulate investment and growth in "normal" times is laudable. However with the effects of the Ukraine war and raging inflation generally we are not living in "normal" times and therefore it can be argued that unusual solutions need to be deployed.

With the price of fuel being so high and Joe Public seeing energy companies making excessively high profits people quite rightly will see a direct correlation and think it unfair. By all means reinstitute the investment tax advantages when we return to more manageable energy costs but in times of crisis like right now I don't think it unreasonable to redistribute the energy profits directly to the most needy.

[Feedback]

Re: Windfall tax

That may well be a sound economic argument but of course there are other dimensions to this issue too, particularly political and sociological ones.

The attempt to stimulate investment and growth in "normal" times is laudable. However with the effects of the Ukraine war and raging inflation generally we are not living in "normal" times and therefore it can be argued that unusual solutions need to be deployed.

With the price of fuel being so high and Joe Public seeing energy companies making excessively high profits people quite rightly will see a direct correlation and think it unfair. By all means reinstitute the investment tax advantages when we return to more manageable energy costs but in times of crisis like right now I don't think it unreasonable to redistribute the energy profits directly to the most needy.

energy companies (the businesses you and I buy our energy from) are not making excessive profits. This is another myth. The energy retailers are pretty much struggling, with so many going to the wall in the past couple of years.

The excessive profits are being made by the wholesalers - those who get the dead trees out of the ground and sell it to the energy companies.

[Feedback]

Re: Windfall tax

That may well be a sound economic argument but of course there are other dimensions to this issue too, particularly political and sociological ones.

The attempt to stimulate investment and growth in "normal" times is laudable. However with the effects of the Ukraine war and raging inflation generally we are not living in "normal" times and therefore it can be argued that unusual solutions need to be deployed.

With the price of fuel being so high and Joe Public seeing energy companies making excessively high profits people quite rightly will see a direct correlation and think it unfair. By all means reinstitute the investment tax advantages when we return to more manageable energy costs but in times of crisis like right now I don't think it unreasonable to redistribute the energy profits directly to the most needy.

a few weeks ago people on here were complaining that pension funds were suffering due to Liz Truss's (ahem) management of the economy. Now here we are complaining that the same pension funds (the main owners of the shares in the petrochems) are benefiting.

What do we want - good pension funds or funds that tank? make your mind up and then apply it consistently.

[Feedback]

Re: Windfall tax

Drycleaning would you have a link / evidence where they pay 60% corporation tax in the UK ?

If true didn't know that

read up on the ring fenced charge and supplementary charge (start here)

Brought in by Osborne way back when.

RFCT = 30%
supplementary charge = 10%
windfall = 25%
Total 65%

my mistake, its 65% and not 60%