UK to eliminate tax loophole aimed at oil and gas companies' profits.

British Finance Minister Rachel Reeves announced on Thursday that she would prevent multinationals, including oil and gas companies, from minimizing their tax obligations through corporate structures that utilize foreign branches.

In her speech outlining various measures to assist British consumers, Reeves indicated that these reforms would help fund initiatives such as free bus fares for children, food tariff reductions, and tax breaks for family attractions.

She explained that the reform would stop losses linked to foreign branches from shielding British profits from taxation. Reeves stated that closing this loophole is anticipated to generate hundreds of millions of pounds annually. "Currently, some oil and gas companies that operate internationally through foreign branches have organized their tax arrangements so they pay minimal or no corporation tax on their UK energy trading profits," Reeves informed Parliament. "Today we're ending that practice," she asserted, noting that this action would align Britain with how other nations handle foreign profits.

Britain maintains one of the strictest tax regimes for oil and gas producers, which includes a windfall levy of 38% when prices exceed government-established thresholds, resulting in an overall tax burden of 78% under those circumstances. Firms operating in the North Sea, such as Shell, BP, Ithaca Energy, and Harbour Energy, did not immediately reply to requests for comment.