What is the windfall tax and what do the latest changes mean?

The move comes as fears grow over rising fuel poverty in the UK, writes Samuel Webb

Wind farms will face a new windfall tax, the chancellor said on Thursday. (Anna Gowthorpe/PA) (PA Archive)

Chancellor Jeremy Hunt has announced the windfall tax on oil and gas giants will increase from 25 per cent to 35 per cent and extend the tax to 2028, having faced pressure to increase the Energy Profits Levy, as it is known. From the start of 2023, a tax will also apply to “low-carbon electricity generators” – including wind, solar and nuclear, levied at 45 per cent. Hunt says the measures will help raise an estimated £14 billion for the public purse next year.

What is a windfall tax?

A windfall tax is when the government imposes an extra levy on a company after it makes money from an event outside their control.