Posts on social media claim that “for every £1 energy companies invest in green energy they receive 91p back from the tax payer”.
The posts do not make it clear what exact policy they refer to. There is no government scheme matching these claims with regards to clean energy.
It appears the post misunderstands a recent change to government policy which means energy companies can now get a 91p tax saving on every £1 they invest in oil and gas extraction in the UK. This was announced in May, as part of the government’s Energy Profits Levy Bill, which was passed in July.
The Bill also raised the headline tax rate on oil and gas company profits from 40% to 60%.
During the debate on the Bill Simon Clarke, Chief Secretary to the Treasury, said: “We expect that the energy profits levy, with its investment allowance, will lead to an overall increase in investment. Indeed, one oil and gas company has already said that the immediate investment allowance should spark further investment in the North Sea.”
As the Bill was debated it faced criticism from some groups for focusing tax relief on oil and gas investments, rather than renewable sources of energy.
There are a number of schemes to encourage businesses to operate in environmentally friendly ways, for example enhanced capital allowances for buying items such as electric cars. However, there is no government scheme matching the green energy claims made in the post.
Image courtesy of Ben Wicks