Ministers have been accused of “letting oil and gas giants off the hook” after the Government admitted it does not check how much tax is being avoided through a loophole in its windfall tax.
Chancellor Jeremy Hunt was urged to use Thursday's Autumn Statement to close the loophole and raise millions more pounds to help struggling families through the cost-of-living crisis.
Shell admitted earlier this month it has paid zero windfall tax despite record profits from soaring gas prices.
BP is set to pay just £700million on £7.1billion in profits.
A windfall tax on the UK oil and gas sector was introduced in May, with expectations it would raise £5billion in the first year.
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The Lib Dems said oil and gas giants have benefited from the Government’s investment allowance which gives companies 91p back in tax for every £1 invested in fossil fuel extraction.
Following written parliamentary questions, Treasury Minister James Cartlidge admitted “no estimate has been made to date of the amount of tax revenue that has been offset by the investment allowance”.
Lib Dem Treasury spokeswoman Sarah Olney, who uncovered the omission, told the Mirror: “The Conservatives’ botched windfall tax has already seen millions of pounds of taxes poured down the drain.
“It’s staggeringly incompetent that they won’t even check how much more is set to be lost.”
Yesterday the Mirror joined newspapers and media organisations across the world in backing a windfall tax on energy firms.
We said: “Developing nations should be given enough cash to address the conditions they did little to create - especially as a global recession looms.
“As a minimum, a windfall tax on the combined profits of the largest oil and gas firms - estimated at $100billion in the first three months of the year - needs to be enacted.”
A Treasury spokesman said: "The Energy Profits Levy strikes a balance between funding cost of living support while encouraging investment in order to bolster the UK’s energy security.
“We have been clear that we want to encourage reinvestment of the sector’s profits to support the economy, jobs, and our energy security, which is why the more investment a firm makes into the UK, the less tax they will pay.
“Accounting for its investment allowance, the Levy is expected to raise £17billion this year and next to help fund cost of living support for eight million people.”
