Shell made net tax payments of $8 million for its UK North Sea operations last year — less than it paid its outgoing chief executive.
The London-listed oil and gas major said it had incurred a $134 million tax bill under Britain’s “energy profits levy” windfall tax in respect of its 2022 profits.
However, it disclosed yesterday that only $57 million of this was actually paid in 2022, with the remainder due this year, and that it had received more than $49 million in tax rebates last year related to decommissioning.
Spud continually tells us that the real tax number to look at for a corporation is cash tax paid. But here we have proof that’s not so.
” the remainder due this year”
Corporation tax is often paid in arrears. On the very useful grounds that it’s a charge to profits, profits are only known – known, not estimated – after the end of the financial year. Therefore cash tax paid in a specific financial year is not the tax bill for that financial year.
But then we knew The ‘Tater doesn’t know much about tax.
As to the refunds, that’s tax they paid years ago on fields. Because Chancellors always want their money early. Instead of allowing companies to build up a sinking fun to pay for hauling old rigs away they insist on tax being paid. Then you get a tax rebate 30 years in the future when you do haul the rig away.
“Corporation tax is often paid in arrears. On the very useful grounds that it’s a charge to profits, profits are only known – known, not estimated – after the end of the financial year.”
Not so fast.
From HMRC “For accounting periods of 12 months, you’ll normally pay your Corporation Tax in 4 quarterly instalments, 2 of which are due before the end of your accounting period”
I claim that “often” covers that.
I think the changes were brought in by Gordon is a moron. But no subsequent chancellor has dared to change what is obviously a ridiculously complex system that must be a nightmare for HMRC to administer.
On the contrary, it’s really easy to administer.
HMRC’s process is just to wait until the return is filed, work out what should have been paid when, then charge interest on anything that was a bit late. Exactly the same as for companies paying normally (except that the interest rate is slightly different).
The trawlermen responsible for turning the North Sea into a desert insist that structures are cut off at the sea bed. But cutting them off at say 20 metres depth would save an awful lot on decommissioning costs, thereby helping the treasury and ensuring that at least part of the sea became a protected marine reserve.
@philip: can’t we just convert them into bird-choppers?