Energy (Oil and Gas) Profits Levy Act 2022 section 1

Charge to tax

Section 1 establishes the energy (oil and gas) profits levy, a temporary tax charged at 38% on the adjusted ring fence profits of UK oil and gas companies for qualifying accounting periods running from 26 May 2022 to 31 March 2030.

• The levy is charged at 38% on a company's levy profits for each qualifying accounting period, treated as if it were corporation tax.
• Qualifying accounting periods are those beginning on or after 26 May 2022 and ending on or before 31 March 2030, with transitional rules for periods straddling those dates.
• Levy profits are based on ring fence profits but with specific adjustments: an investment expenditure uplift is allowed, while financing costs, decommissioning costs, certain petroleum revenue tax repayments, and standard corporation tax loss and group relief provisions are all excluded from the calculation.
• Where a company incurs a qualifying levy loss, relief may be claimed by carrying the loss back or forward, or through group relief, under Schedule 1 of the Act.