Huge news. Two of the biggest climate villains of our time have teamed up to pull off what could be a £1.3 billion tax dodge. Shell and Equinor are forming a new joint venture, Adura, which will be the new owner of the Rosebank oil field.
Adura looks to be exploiting a loophole that allows Shell to write off its profits against Equinor’s tax losses. If they succeed, investigators from Global Witness have found they will effectively dodge at least £1.3 billion in UK taxes. This seems like a corrosive case of "loss buying".
By not investigating this £1.3 billion tax dodge, the Treasury is potentially giving a massive financial boost to the very company that is trying to drill Rosebank.
To put this into perspective, £1.3 billion could cover a year’s worth of:
- Salary for 31,976 nurses,
- or free school meals for all 2.2 million eligible pupils,
- or damages from all UK floods. [1]
Instead, these wealthy oil companies are pocketing it themselves.
Talk about adding insult to injury: if developed, Rosebank would also pose a net tax loss of £250 million to the UK Treasury.
We need to flood the Chancellor of the Exchequer, Rachel Reeves, with demands to intervene, investigate this deal, and plug this massive hole in the public purse.
We are demanding the Treasury take three urgent actions:
- Force an investigation: Demand a full assessment of the deal's legality and its potential violation of 'loss buying' anti-avoidance provisions.
- Prevent tax relief transfer: If the deal is found in violation of tax rules, prevent Adura from inheriting Equinor’s tax reliefs.
- Strengthen tax laws: Permanently close this loophole and prevent such deals from ever being attempted again.
The oil industry is seeking to privatise its profits while socialising its tax burden. Blocking this tax grab is a crucial second front in the fight to Stop Rosebank for good.
It takes less than 60 seconds to act. Demand action from Rachel Reeves 👇
For too long, oil giants have simply gotten away with ripping off the public. But they’re underestimating us. Not this time – together we can fix the rules of this rigged system and build a future that delivers for everyone.
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Reference:
1. The Adura joint venture between Shell and Equinor would allow Shell to use Equinor’s tax losses, effectively allowing the company to dodge £1.3 billion in taxes. This is the equivalent of any one of the following:
- Paying the annual average salary of 31,976 nurses. According to the job placement board nurses.co.uk, the average annual salary for UK nurses is between £37,000 and £42,000. Erring on the side of a conservative calculation, we assumed the average salary was £42,000.
- Paying the annual cost of free school meals for over 2 million students. According to House of Commons Library research (page 12), the annual cost of free school meals for all 2.2 million eligible pupils is approximately £1 billion.
- Paying for the annual cost of damages from floods in the UK. According to research by the government’s Chief Scientific Adviser (page 12), flood damage costs the county an estimated £1.4 billion annually.