BP paid tax on its UK North Sea enterprise in 2021 for the primary time in a minimum of six years, in accordance with the corporate’s newest funds to governments report.
(Bloomberg) — BP paid tax on its UK North Sea business in 2021 for the first time in at least six years, according to the company’s latest payments to governments report.
The news comes amid tension between the UK oil industry and the government over a new 25% windfall tax that will fund programs to ease the pain of high energy costs on households. The levy was introduced after several majors posted record profits.
The London-based major paid a total of $127.3 million to the UK’s HM Revenue and Customs, Crown Estate and Oil and Gas Authority. In 2020 the company received a tax refund of $42 million.
BP, like other oil and gas producers in the UK, often don’t pay tax on their North Sea businesses because of losses tied to investments in fields. Many producers also receive rebates for dismantling oil platforms in the aging basin, which has meant in recent years that they’ve received more money from the government than they’ve paid out.
Last year, BP received refunds of around $50 million linked to decommissioning, the report shows.
BP’s payments in 2021 were boosted by a settlement of $178 million related to historical tax matters including included previous over and under payments, according to the report.
The figures only cover the extractive side of BP’s business, meaning its North Sea operations. BP separately publishes a report of its total tax contribution to the UK including corporate and employer taxes, as well as production levies and refunds. That report shows the firm paid $263 million in 2020, with the bulk of that coming from employer contributions.
The Reports on Payments to Government Regulations were signed into law in 2014, requiring oil, gas and mining companies incorporated in the UK to disclose annual payments made to countries in relation to extractive industries.