Workers are looking to demolish the Northern Wildfall tax in the Dash for growth
Chancellor Rachel Reeves has plans to threaten the Willefall tax on Northern Oil and Gas in a bid to boost investment and stimulate economic growth.
The Energy ProFits Levy (EPL), which was introduced in 2022 under Rishi Sunak Anid to increase global energy prices, currently sets an effective tax rate of 78 percent for 78 percent of workers. Now the Treasury is considering whether to end the tax early, in addition to the growing fear of preventing capital investment and threatening the outflow of domestic energy at home.
Sources close to the talks said the officials are consulting with the major maritime operators in the North to re-iterate how much money will be refunded if the tax is removed. The move would mark a dramatic turnaround for the Labor government, which once supported tax expansion but now faces mounting pressure on growth.
The body sector Offshore Energies UK (Oeuk) has warned that the sector is losing 1,000 jobs per month as a direct result of the levy, with capital investment, investment and production both falling faster than expected. The group urged the chancellor to replace the tax with a more stable, long-term framework, arguing that uncertainty over the levy is driving companies to shift their investment.
The Office for Budget Responsibility (OBR) supported Ms Reeves’ decision to increase the levy from 75 per cent to 78 per cent and extend it to 2030. However, it also warned that the move will lead to investment in investments up to the end of 9.2 percent in the FITNESS ONLINE
Oil and gas revenues also came in below forecast. The Treasury’s March consultation admitted that, while the EPL was originally expected to generate £19 billion by 2030, weak prices and outflows have reduced returns.
Under current rules, ministers can remove the levy if oil and gas prices fall below $71.40 a barrel and 54 pence per therm for at least six months. While fuel prices remain higher than their previous levels, Brent Crude has been sold below $70 for most of 2025, causing conditions for the withdrawal of the Levy.
The buildings are also expected to unveil a new strategy for North Seagness Energy alongside the autumn budget, setting out how the government will support “limegrown energy” and encourage new exploration. Prime Minister Sir Keir Starmer has promised to “double down” on domestic fuel and gas emissions to protect the UK’s energy security and reduce reliance on imports.
The potential tax cuts come amid a tightening backrope. The OBR recently warned that productivity growth has left the UK economy unable to expand at the previous pace, blowing a $20 billion hole in public finances.
MS REVES is under increasing pressure to deliver a credible growth strategy that restores business confidence. The Treasury is hoping to sign off on a more aggressive investment environment so that energy producers can spend more, protect jobs, and demonstrate financial stability ahead of the budget.
Any decision will depend heavily on the OBR’s final analysis of whether scrapping the levy will make enough money for the economy to make up for the short-term loss of revenue. The Treasury authorities are also examining whether a permanent variable tax could replace the tax, applying only when prices exceed certain limits – a measure that aims to balance the currency’s aggressiveness.
Energy Firms have carefully embraced this prospect of change. One senior executive said ending the levy early could be a “game changer” for investment decisions. “The UK has the world’s largest energy infrastructure, but the financial environment has been toxic,” they said. “If Labor follows through, it will send a strong signal that Britain is open to energy investment again.”
The Treasury declined to comment on whether changes to the Windfall tax would be included in the budget.
