BP oil spill: UK taxpayers face Gulf clean-up loss

[jpak]

http://www.guardian.co.uk/business/2010/jul/27/bp-oil-spill-taxpayers-clean-up-costs

BP is poised for fresh controversy after it emerged today that the UK Treasury will lose hundreds of millions of pounds as a result of the oil clean-up in the Gulf of Mexico.

The cost of the clean-up has pushed BP into the red, meaning the oil company will be able to book a near-$10bn (£6.5bn) tax credit, slashing its tax bill in the US and Britain. The loss comes on top of a plunge in tax revenues after BP halted its dividend payouts to shareholders.

The news will dismay politicians in Westminster, since the coalition government needs all the tax revenues it can get as it introduces austerity measures to deal with the deficit. The majority of the tax credit is likely to relate to the US, but the exchequer is also likely to lose out badly. BP paid $8.4bn of corporate taxes last year, with roughly £930m going to the UK government. Tax experts reckon it paid a similar amount in US taxes.

While the spill will reduce the level of BP's corporate taxes, the news comes on top of the hundreds of millions lost to the exchequer in the form of lost dividend taxation.

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