From 1 January 2023, the rate of the energy profits levy will be increased to 35% from 25% to ensure oil and gas companies benefiting from increased profits will pay more in tax.

In addition to this, a new and temporary tax of 45% will be charged on the profits of electricity generators which, like the oil and gas sector, have seen profits increase.

The energy profits levy will see an overall rise in payments from 65% to 75% on profits from UK operations. This will last until March 2028, extended from the previous end date of December 2025.