UPDATE 2-UK to close tax loophole, targeting oil and gas firms' profits

British finance minister Rachel ​Reeves said on Thursday she ​would stop multinationals, including oil ‌and gas ​firms, from reducing their tax liability by using corporate structures that involve foreign branches. Reeves made the ‌announcement in a speech setting out a range of measures to help British consumers, saying the changes would help fund free bus fares for children, tariff cuts ‌on food and a tax break for family attractions.

British finance minister Rachel ​Reeves said on Thursday she ​would stop multinationals, including oil ‌and gas ​firms, from reducing their tax liability by using corporate structures that involve foreign branches.

Reeves made the ‌announcement in a speech setting out a range of measures to help British consumers, saying the changes would help fund free bus fares for children, tariff cuts ‌on food and a tax break for family attractions. The reform would prevent ‌losses attributable to foreign branches from sheltering British profits from tax, she said. Reeves said closing the loophole was expected to raise hundreds of millions of pounds per year.

"Currently, some oil ⁠and ​gas groups that ⁠operate overseas through foreign branches have structured their tax affairs in a way which ensures they ⁠pay little or no corporation tax on their UK energy trading profits," Reeves told parliament. "Today ​we're putting an end to that practice," she said, adding that the ⁠move would put Britain in line with how other countries treated foreign profits.

Britain has one ⁠of ​the toughest tax regimes for oil and gas producers, which includes a windfall levy of 38% when prices exceed government-set thresholds, bringing the overall ⁠tax burden in such circumstances to 78%. Firms operating in Britain's North Sea fields, ⁠Shell, BP, Ithaca Energy, ⁠Harbour Energy, did not immediately respond to requests for comment.