Fact checking the fact checkers – Did Shell pay no tax last year?

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Fact checking the fact checkers – Did Shell pay no tax last year?
Read Time:3 Minute, 39 Second


Reading Time: 3 mins

News broke today that fuel giant Shell paid no taxes last year. Alongside this, it emerged that Shell had received more than £100 million in UK taxpayer money in 2021. This resulted in the Labor party accusing the government of giving “uniquely generous” tax and subsidies which favor oil and gas suppliers.

At MoneyMagpie, we first saw this story on social media. A well-known Instagram account with a following of almost half a million people (485k), UKFactCheckPolitics, posted the following:

This, understandably, caused an uproar across the internet. With yet another increase to the energy price cap looming, families struggling to eat, and many people worried to cook food due to the cost of energy, people across social media were angry.

So, we decided to fact-check the fact checkers. Is this statement true?

our findings

After doing a little digging, we found our answer. This statement is true. But how do we know this? The payment of over £100 million in taxpayer money was revealed in a report by Shell themselves.

However, this report showed that the company did pay tax – £17 billion in taxes and royalties to governments across the globe. So why are people suggesting they paid no tax at all? Well, in the UK, the subsidies given by the UK government far outweighed the tax they received in return. Meaning overall, losses were made by the company when paying tax. In fact, they made more from the government than they lost.

The UK was the largest payer when it came to subsidies. India came in second, paying subsidies of £15 million, followed by Germany at £3 million. That is a £97 million difference between the us and the third highest paying country.

This seems absurd, at a time when Liz Truss, who is a front runner to become the next Prime Minister, has said there cannot be “handouts” made to struggling households to help them cope with the cost-of-living crisis and skyrocketing energy costs. Shadow climate change minister Kerry McCarthy said energy companies need to be made to pay their “fair share”.

In a statement released by Shell, a spokesperson for the company said:

“The tax payments, which were set out in our voluntary Payments to Governments report, published this spring, relate to a tax relief framework that both Conservative and Labor governments have had in place to provide the oil and gas industry with long-term investment clarity .

“We have a responsibility to safely and efficiently decommission legacy assets, which requires significant expenditure. Under the tax framework, which dates back to 1975, companies holding a license in the UK or on the UK continental shelf and decommissioning an asset can claim a tax deduction in their corporation tax return equal to the amount spent on decommissioning those assets.”

Vicky Parry, Content Editor at MoneyMagpie.com says:

“The reality is that we are being bombarded with information all around. Much of it created to anger and rile us, much of it to cause division. This leaves us unsure where to turn and where realities lie. However, economic matters can be easily checked.”

“To read all over social media that oil companies have avoided paying taxes, while a huge percentage of the UK is making a choice between energy bills and food has not gone down well with us or a huge amount of the public. The government needs more than ever to address this, and laws have to be implemented to stop the working classes in the UK bearing the brunt of this recession. As it stands, we are heading more into a depression than a recession and every single person needs to work through this together. While people like ourselves are working round the clock to try and find pockets of money for people, it currently feels like a race to the bottom. This HAS to change.”





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