From the 1st of January 2023, the Energy Profits Levy (EPL) rate will rise by 10 percentage points to 35% and will be extended to the 31st of March 2028. The investment allowance will be reduced to 29% for all investment expenditure (other than decarbonisation expenditure) broadly maintaining its existing cash value. Decarbonisation expenditure will continue to qualify for the current investment allowance rate of 80%.
The government will legislate for these measures in Autumn Finance Bill 2022, except the changes related to decarbonisation expenditure which will be legislated for in Spring Finance Bill 2023.
