Latest news with #PublicInterestBusinessProtectionTax
NDTV
31-07-2025
- Business
- NDTV
UK Introduced A 75% Tax, But No One's Ever Paid a Penny. Here's Why
The Public Interest Business Protection Tax (PIBPT) is a special UK tax law that was introduced in 2022. It's surprising because it has never actually collected any money since it started, according to The Metro. This tax was created during a chaotic time when energy prices were soaring after Covid and Russia invaded Ukraine. Its main purpose wasn't to raise funds for the government. Instead, it was designed to act as a strong warning to energy companies. The idea was to stop them from making decisions that could cause them to fail, which would then leave the public to deal with the mess and costs. Think of it as a legal threat to prevent big problems, rather than a way to get tax money. Why Was It Introduced? According to The Metro, the 2022 Finance Act introduced PIBPT to prevent large businesses specifically those with over 100 million pounds in turnover-from shifting or cashing in valuable energy contracts just before an energy supplier entered administration. Such practices, according to HMRC, would have pushed massive costs onto the government and consumers and potentially disrupted the energy supply. A Tax Used As A Warning Experts believe the tax filled a gap left by slow-moving regulators like Ofgem. Dan Neidle, founder of Tax Policy Associates, called it "a weird measure" that used taxation in place of timely regulation. Others argue it was easier to introduce a tax than to get fast action from existing watchdogs. Today's quiz. There's a tax on the UK statute book that nobody has ever paid. Not once since it was introduced. What is it? The prize is a lifetime subscription to the Tax Policy Associates newsletter. — Dan Neidle (@DanNeidle) July 25, 2025 Though aimed at energy firms, the law includes provisions to extend its reach to other industries considered vital to public interest. Why No One Ever Paid With a steep rate of 75%, the tax was intimidating enough to work exactly as intended. No major companies crossed the asset-shifting line, and PIBPT was never triggered making it one of the most effective yet unused taxes in UK history.
Metro
30-07-2025
- Business
- Metro
There's a 'weird' tax in the UK that nobody has ever paid
People say that death and taxes are the only certainties in life, but it seems that only one of those is true. It turns out, there is a tax currently on the UK statute book that no one has ever paid, and it has never generated even a penny of revenue. Not a single one. It's the Public Interest Business Protection Tax, and, no, we'd never heard of it either. If you're wondering how it's possible that a tax was passed into law but never collected, there's actually some pretty clear logic behind it. The Public Interest Business Protection Tax (PIBPT) is something of a unique concept within the UK tax system, as it was originally, in some sense, not to be revenue-raising. Introduced in the Finance Act of 2022, the tax was presented as a deterrent to discourage large businesses (over £100 million) from taking actions that might lead to the collapse of energy companies. This was all amid huge uncertainty of the energy markets in the wake of the COVID-19 pandemic and Russia's invasion of Ukraine. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video These actions could have included transferring or cashing in valuable energy contracts within a corporate group, just before an energy supplier entered administration. In the HMRC summary of the tax, it states that 'such arrangements would lead to substantial increased cost falling on the government and energy consumers and would also risk disruption to the supply of energy'. Simply put, when energy suppliers collapse, the risk to the public purse goes up, and the government wanted to guard against any shady business moves that might see companies profit off that happening. Speculating on the need for the tax, and posting on X, 'tax realist' and founder of Tax Policy Associates, Dan Neidle said, 'I'd never heard of the Public Interest Business Protection Tax before this morning. 'It's a very weird measure which is using a tax to do the job of the energy regulator, presumably because the energy regulator was being too slow.' This theory is seemingly supported by a comment from a website on resources for accountants and advisors, which said, 'The government acted [with PIPBT] as it recognises that Ofgem cannot react quickly enough and this draws the question, why it is easier to create and impose a new tax than it is to enforce regulatory body actions?' More Trending While the legislation currently applies only to energy supply companies, it includes provisions that could allow future extension to 'other public interest businesses' deemed essential for the public good. If you think your last payslip on income tax gave you a raw deal, then you'll be glad you never had to pay PIBPT, as it ran at 75%. Today's quiz. There's a tax on the UK statute book that nobody has ever paid. Not once since it was is it?The prize is a lifetime subscription to the Tax Policy Associates newsletter. — Dan Neidle (@DanNeidle) July 25, 2025 Put simply, the reason the tax was never collected upon was that it seemingly did its job as a deterrent. View More » While several large energy suppliers collapsed during the market uncertainty, none of those cases involved the specific 'asset-shifting' actions above the £100 million threshold that would have triggered the PIBPT. Do you have a story to share? Get in touch by emailing MetroLifestyleTeam@ MORE: Martin Lewis' MSE warns parents with kids aged 47 to 15 they could be owed thousands MORE: HMRC doesn't know how much tax billionaires in the UK pay Your free newsletter guide to the best London has on offer, from drinks deals to restaurant reviews.
