Energy Profits Levy: Energy Security Investment Mechanism legislation
This tax information and impact note is about amending the Energy Profits Levy to make sure it permanently ends if prices return to historically normal levels.
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The Energy Profits Levy is a temporary tax on the exceptional profits of oil and gas companies.
This measure provides for the Energy Investment Security Mechanism (ESIM). It will end the Energy Profits Levy early if the 6-month average price for both oil and gas is at or below the ESIM threshold prices.
The ESIM threshold prices are 71.40 dollars per barrel for oil and £0.54 per therm for gas. These thresholds are based on a 20-year average to the end of 2022. These thresholds will be adjusted from 1 April 2024, and annually thereafter, by the preceding December’s Consumer Prices Index figure.