Welcome to the September 2022 Newsletter from Walsh & Co

Offshore Energies UK (OEUK) has called for the Energy Profits Levy, otherwise known as the 'windfall tax', to be scrapped by 2025 or it risks adversely affecting investment in the energy sector.

Meanwhile, official data recently revealed that HMRC took £14 billion in capital gains tax (CGT) in the 2020/21 financial year.

Energy firms call for windfall tax to be scrapped by 2025

Trade body OEUK has stated that the Energy Profits Levy, also known as the 'windfall tax', on UK energy firms should be scrapped by 2025 or it could risk having a 'detrimental impact' on investment in the sector.

OEUK said that a new round of windfall taxes would 'leave the UK facing decades of energy insecurity' and only serve to 'heap further costs on consumers'.

The trade body warned that imposing new taxes would 'make the UK seem fiscally unstable and a riskier place to invest'. It said that if investment in the sector declined, then production would plummet – creating a 'disaster' for UK energy security.

Mike Tholen, Sustainability Director at OEUK, said: 'The government has a duty to both protect consumers and to ensure national energy security. Labour's proposals to hit our own producers with further taxes will discourage investment and so risk a rapid decline in UK production.

'That would mean buying more energy from abroad, increasing the UK's trade deficit and further risking UK energy security.

'It comes at the worst possible time for the UK offshore sector, which is still reeling from the introduction of the windfall tax in May.'

HMRC takes record £14 billion in capital gains tax

Official data recently revealed that HMRC took a record £14 billion in CGT in the 2020/21 financial year.

The data showed that the total amount of CGT liability was £14.3 billion for 323,000 taxpayers. HMRC said that the liability has increased by 42% from the previous tax year.

Policy changes affecting the eligibility criteria for Business Asset Disposal Relief (BADR) contributed to the increase in CGT liabilities, HMRC added.

8% of CGT came from CGT disposals that qualified for BADR. HMRC found that BADR was claimed by 47,000 taxpayers on £11.9 billion of gains in the 2020/21 tax year, resulting in a total tax charge of £1.1 billion.

Additionally, in the 2020/21 tax year 129,000 taxpayers used the CGT on property service to file 137,000 returns. These returns revealed a tax liability of £1.7 billion, which was accrued on disposals of residential property.

ESSENTIAL TAX DATES FOR SEPTEMBER

1 September
New Advisory Fuel Rates (AFR) for company car users apply from today.

19 September      
PAYE, Student loan and CIS deductions are due for the month to 5 September 2022.

30 September      
End of CT61 quarterly period.

QUOTE OF THE MONTH

'Apart from raising prices, the main response to these adverse pressures from businesses is likely to be to simply hunker down, reduce costs where possible and get on with it: that is, to pause expansion plans and, for those with employees, to cut back on hiring, hoping that conditions will improve over the coming year.'

Jonathan Portes, Professor of Economics and Public Policy at King's College London, commenting on rising energy prices being the 'greatest test for SMEs'.

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