Shell reveals last year without paying UK corporation tax
Royal Dutch Shell paid no corporation tax in the UK last year, even though it paid billions in other jurisdictions.
The Anglo-Dutch oil major paid a total of $7.8 billion in corporate tax and $5.9 billion in royalties last year on pre-tax profits of $25.5 billion, according to an annual report released on Tuesday.
But the UK – along with France, South Africa and Indonesia – have given the company money back.
The figures were published in an annual report by the oil company showing an overall breakdown of payments. This is only the second time it has released numbers in this way.
Shell received $116 million from the UK government, following a similar return to the company in 2018, which it attributed to tax losses linked to investments in new fields in the North Sea and rebates linked to the dismantling of aging oil platforms.
Oil companies can apply for tax relief to help offset expenses associated with plugging and abandoning wells and removing equipment. They can deduct the costs from their profits or claim back the fees they have already paid.
The British government has extended credit to oil companies while imposing reduced tax rates on their profits since changes to the tax code in 2016.
The move, under then Chancellor George Osborne, was aimed at increasing investment in Britain’s continental shelf at a time when falling oil prices raised questions about the future of the sector.
But even as the industry stabilized, with oil prices climbing back above $60 a barrel, production rising and costs remaining low, the UK Treasury failed to reap the rewards of other major countries. producers.
Oman was the biggest recipient of Shell money last year with $2.9 billion, followed by Norway with more than $1 billion and Nigeria with $851 million.
The coronavirus crisis has hit the oil sector hard, but it also threatens to heighten scrutiny of its contributions to the UK economy, as Chancellor Rishi Sunak faces a dilemma over how to plug a hole in the coffers of the British government triggered by the pandemic.
Even Jessica Uhl, Shell’s chief financial officer, acknowledged on Tuesday that “in times of crisis like the Covid-19 pandemic, taxes are also at the heart of government policies to support people’s lives and livelihoods.”
Dismantling oil and gas rigs and other infrastructure in Britain’s North Sea as supplies begin to run out could cost British taxpayers £24billion, the watchdog warned last year expenditure of Parliament.
Shell employs more than 6,400 people in the UK, where its revenue last year was $92 billion. This compares to $8.4 billion in Oman and $2.4 billion in Norway.
Shell said it pays corporation tax in 99 countries and its effective tax rate is 35.5%.
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