- BP says it paid £1.2 billion in UK taxes during 2025.
- Government plans to raise more revenue by closing overseas tax loopholes.
- Debate intensifies over North Sea investment and Britain's energy future.
BP has revealed it paid £1.2 billion in UK taxes during 2025, placing the oil giant at the centre of a growing debate over how Britain taxes energy companies at a time of rising profits, changing energy policies and mounting pressure on public finances.
The disclosure comes as the government moves to tighten tax rules affecting oil and gas firms, including changes designed to prevent companies from reducing their UK tax liabilities through overseas corporate structures. The plans are expected to raise hundreds of millions of pounds and have renewed attention on the contribution major energy companies make to the UK economy.
According to BP, the £1.2 billion figure includes £422 million paid through the Energy Profits Levy, commonly known as the windfall tax, which is charged on profits from UK oil and gas production at a rate of 38 per cent. The company also paid corporation tax, employer National Insurance contributions, business rates and customs duties.
When taxes collected on behalf of the government are included, such as employee income tax, VAT and fuel duties, BP said its total tax contribution reached £3.4 billion during 2025.
The figures arrive only weeks after Chancellor Rachel Reeves announced plans to close what ministers describe as a tax loophole involving the overseas activities of oil and gas companies. Speaking during a package of cost-of-living support measures, Reeves reportedly said the government would stop companies, including BP, from lowering their UK tax bills through foreign branch arrangements.
Profits, jobs and the North Sea debate
The discussion around tax comes against a backdrop of stronger earnings across the energy sector. Earlier results showed BP's first-quarter profits more than doubled to £2.4 billion ($3.2 billion), helped in part by strong performance from its energy trading operations during a period of heightened volatility in global oil markets.
The surge in earnings followed sharp movements in oil prices linked to tensions in the Middle East, which boosted trading activity for major energy firms including BP and Shell.
At the same time, BP is seeking to underline its broader economic role. The company said it employed 12,960 people during 2025 and supported an estimated 63,000 jobs across the UK through its wider supply chain. Research by Oxford Economics also estimated BP contributed around £7 billion to UK GDP.
Louise Kingham, BP's UK head of country, reportedly said the company's footprint extends beyond North Sea production and includes more than 1,100 retail sites, aviation fuel operations serving over 60 airports, lower-carbon energy projects, trading activities and research facilities.
Energy transition meets economic reality
The tax debate is unfolding alongside wider arguments over Britain's energy strategy. The government recently outlined plans for an Energy Independence Bill aimed at delivering Labour's pledge not to issue new licences for oil and gas exploration.
Energy secretary Ed Miliband has reportedly argued that expanding nuclear, wind and solar power will strengthen the UK's long-term energy security, while existing oil and gas fields will continue operating for their natural lifespan.
Critics, however, have questioned whether restricting future North Sea development could increase reliance on imported energy. Conservative shadow energy secretary Claire Coutinho reportedly said the approach risks making Britain more dependent on foreign suppliers.
For BP, the timing is significant. As ministers look for additional tax revenue and accelerate the shift towards cleaner energy, the company finds itself balancing two competing messages, highlighting its contribution to public finances while defending the continued role of domestic oil and gas production in the UK economy.
