Outlook 2025: Navigating the windfall tax and the future of UK energy

Policymakers and stakeholders must work together to develop a stable and predictable fiscal regime that prioritises the country’s energy security and economy

The UK government recently announced an increase in the windfall tax on oil and gas companies from 35% to 38%, a move aimed at capturing a share of the “extraordinary profits” generated during soaring energy prices. While the additional 3% will undoubtedly inject a significant sum into the budget, concerns are mounting about the potential long-term consequences for the UK’s energy security and economy. The windfall tax, designed as a temporary measure, is intended to fund support packages for households struggling with rising energy bills. This short-term gain, however, will likely come at a steep price. We must be wary of unintended consequences that could jeopardise the nation’s ener