- At the Autumn Budget 2024, Chancellor Rachel Reeves made further changes to the Energy Profits Levy (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 Energy Security Investment Mechanism (ESIM) remains in place.
- In March 2025, HM Treasury (HMT) launched a consultation on plans for a permanent mechanism to replace the temporary EPL upon its expiration in 2030 (or earlier if the ESIM is triggered). The consultation explores two potential models for a permanent mechanism: a revenue-based model and a profit-based model. Also in March 2025, the Department for Energy Security and Net Zero (DESNZ) launched a broader consultation on the North Sea's energy future.
- Timing: the EPL will end on 31 March 2030, or earlier if the ESIM is triggered. The HMT consultation closed on 28 May 2025 and the DESNZ consultation closed on 30 April 2025.
Resources (click to open)
