UK government announces windfall tax on energy firms

Oil and gas firms operating in the UK have been hit by a 25% windfall tax on their profits, which have soared in recent months.

The one-off Energy Profits Levy will help pay for a £15bn package of measures to help households with the cost of living crisis.

Chancellor Rishi Sunak said the new windfall tax was necessary because the industry is making “extraordinary profits not as the result of recent changes to risk taking or innovation … but as the result of surging global commodity prices driven in part by Russia’s war”.

The opposition Labour party has been calling for such a tax since January.

Every household in the UK will get £400 off their energy bill this autumn. The previously announced £200 discount will be doubled to £400 and turned from a loan into a grant, with future repayments cancelled.

The poorest households will also get a payment of £650 to help with the cost of living.