Concerns grow for UKCS investment

Commentators are unconvinced that tax relief on spending will offset the impact of windfall levy uncertainty

UK finance minister Rishi Sunak claims his new 25pc supplementary tax on UK continental shelf (UKCS) profits “contains in it a very generous investment incentive” that will encourage activity in the basin even after its operators have been clobbered for £5bn ($6.3bn) in the new levy’s first year. But analysts are unsure the reality will match his intentions, particularly given the windfall tax could last for up to three-and-a-half years and might even become more punitive. “We have already had BP announce, in the past 24 hours, that it is now reviewing all of its investment in the UK economy in the aftermath of this decision, simply on the basis that it is not a one-off tax,” Michael Hewson,