Offshore Energies UK (OEUK), the trade body representing Britain’s offshore energy sector, says an earlier shift to a new oil and gas tax framework could materially boost government revenues. In its annual Economic Report, the group said bringing the change forward to 2027 could generate an additional £14.9 billion, or about $20 billion, for the UK over the next decade.
OEUK wants the Oil and Gas Revenue Levy to take effect from January 2027 rather than from 2030, as currently planned. The measure is designed to replace the existing Energy Profits Levy and would be triggered by prices, applying when oil trades above $90 a barrel and gas rises above 90p per therm.
Under the proposal, the levy would stand at 35%, on top of the 30% ring-fenced corporation tax rate and the 10% supplementary charge. Current policy is for the Oil and Gas Revenue Levy to replace the Energy Profits Levy after 2030, but the industry argues that an earlier rollout would ease fiscal pressure on operators and help restore investment confidence in the UK North Sea.
OEUK says the UK’s tax and regulatory framework has been changed several times since 2022 under both Conservative and Labour governments. According to the group, that policy instability has made investment planning increasingly difficult and has already pushed some companies to leave the UK North Sea.
The report says implementing OGRL in 2027 instead of 2030 would deliver £2.4 billion more than the current trajectory over the next decade, taking into account Corporation Tax, Energy Profits Levy, Petroleum Revenue Tax and Oil and Gas Revenue Levy. OEUK also estimates a further £12.6 billion from additional payroll taxes, lifting the total incremental impact to £14.9 billion.
Earlier this month, OEUK urged Chancellor of the Exchequer John Healey to introduce the new tax regime from January 2027.
OEUK Chief Executive David Whitehouse said the Energy Profits Levy continues to deter investment in the UK Continental Shelf and is accelerating decline across the country. With the right Budget decisions, he said, the sector could unlock billions of pounds in private investment, support jobs across the UK, strengthen energy security and raise more tax revenue for the Exchequer.
