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PRESS: BP to book USD700 million windfall on UK tax changes - FT

11th Feb 2024 09:27

(Alliance News) - BP PLC is set to book a USD700 million windfall due to UK tax changes aimed at boosting corporate pension fund investment in the economy, the Financial Times reported on Saturday.

The FT said that the London-based oil major is expected to provide more detail about the treatment of the tax liability change in its next annual report due to be published in March.

Last year, UK Chancellor Jeremy Hunt announced plans to relax the tax charge on surplus funds extracted by employers from company pension plans, with the changes to come into effect in April.

"The legislation has not yet been enacted or substantively enacted, but is expected to be effective from April 6," said BP.

"The change is expected to reduce deferred tax liabilities by around USD700 million with the related gain recognised in other comprehensive income when the legislation is substantively enacted."

Shares in BP closed up 0.7% to 479.48 pence each in London on Friday.

On Tuesday, BP released its annual financial results, reaffirming that it is sticking to its commitment to share buybacks despite reporting a profit decline amid a fall in oil prices.

Revenue fell to USD52.59 billion in the fourth quarter of 2023 from USD70.36 billion a year earlier. Quarterly pretax profit dived to USD1.10 billion from USD16.90 billion.

Revenue dropped by 14% to USD213.03 billion from USD248.89 billion on-year. However, pretax profit jumped by 54% to USD23.75 billion in 2023 from USD15.41 billion.

Pretax profit rose despite the fall in revenue, as BP spent USD119.31 billion on purchases in 2023, reduced by 15% from USD141.04 billion in 2022. Further, net impairment and loss on sale of businesses narrowed significantly to USD5.86 billion from USD30.52 billion.

BP said it completed USD1.5 billion share buyback on Friday last week, and now intends on initiating a new USD1.75 billion buyback, prior to reporting its first quarter results which are due on May 7

By Greg Rosenvinge, Alliance News senior reporter

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