- At the Autumn Budget 2024, the new chancellor Rachel Reeves made further changes to the EPL regime in force from 1 November 2024:
- an increase in the EPL rate from 35% to 38% for profits arising after 1 November 2024;
- an extension to the period to 31 March 2030;
- the removal of the investment allowance for EPL purposes, which was an additional 29% allowance generated by capital and certain operating expenditure;
- preservation of the first year allowances and the cash benefit of the investment allowance for decarbonisation expenditure under the EPL regime.
- The ESIM is kept in place and the government took the opportunity of the fiscal event to announce a consultation to take place in early 2025 into how the upstream oil and gas regime responds to oil and gas prices shocks after EPL ends. Certain technical changes were also confirmed to the decommissioning regime to facilitate the change of use of oil and gas fields for the purposes of carbon capture use and storage projects.
- On 5 March 2025, the Department for Energy Security and Net Zero (DESNZ) launched a consultation on delivering the government’s commitment to support a prosperous and managed North Sea transition. On the same day, HM Treasury (HMT) launched a consultation on plans for a permanent mechanism to replace the temporary Energy Profits Levy (EPL) upon its expiration in 2030 (or earlier under the ESIM). The consultation explores two potential models for a permanent mechanism: a revenue-based model and a profit-based model.
- Timing: The DESNZ consultation closed on 30 April 2025 and the HMT consultation is closing on 28 May 2025.
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