BP declines to reveal how much ‘loophole’ saved it in windfall tax

BP declined to reveal how much windfall tax it would have paid without an investment “loophole” when being questioned by MPs on Tuesday, while fellow energy group SSE raised concerns the levy “favours” oil and gas drilling over renewables projects.

Appearing before MPs on the business, energy and industrial strategy (BEIS) committee, the BP vice-president Matthew Williamson said he did not know how much the firm would have paid without an investment allowance that reduces the windfall tax due if a company invests in North Sea oil and gas extraction. He also declined to say how much BP was spending on renewable energy projects this year.

The chancellor, Jeremy Hunt, last week slashed the investment allowance. Companies can only reduce their windfall tax bill by 29% of funds invested in extraction, down from the previous 80% discount. Hunt also increased the tax rate of the levy from 25% to 35% and extended its lifetime by two years.

In a testy exchange, the BEIS committee chair, Darren Jones, asked: “If it wasn’t for the loophole that was put in for investment into…