Shell share price: Group reports lower UK tax payments

By: Anton Aleksandrov
Anton Aleksandrov
Anton is a freshly graduated economist from the States with passion for the world of finance. He is one… read more.
on Apr 10, 2014
Updated: Apr 9, 2020 Thursday, April 10: Royal Dutch Shell (LON:RDSA, LON:RDSB) has reported that its tax payments in the UK declined substantially last year because of lower output in the North Sea and higher spending on mature field decommissioning. As of 11.53 BST, the oil major’s B shares were trading 3.62p or 0.15 percent higher at 2,360.12p.

Shell’s UK corporation tax bill fell about 90 percent to ₤55.5 million last year from ₤487 million in 2012. The bill was less than what the company paid in Nigeria, Australia, Malaysia, Canada, Norway and Italy. The decline was attributed to a 22 percent fall in North Sea production, after maintenance shutdowns, and low margins in refining and marketing. There were also certain tax breaks due to investment in new West of Shetland oil fields. “This situation is by no means unique amongst operators in the UK North Sea – but what is unique is we choose voluntarily to disclose how much tax we pay in key countries, including the UK,” the FTSE 100 company said. “We expect our recent investments of some $2bn (₤1.19 billion) a year to ensure we continue to produce safely from existing assets while investing in new production.”

Shell paid a total of $15.28 billion (₤9.11 billion) in taxes, including excise duty and sales tax, in the UK last year, representing 14 percent of its global tax bill. The payments come second only to Germany, where Shell paid over $21.6 billion (₤12.9 billion) on the back of large downstream operations.

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Shell disclosed the country-specific taxes in its Sustainability Report published yesterday. The company’s public image suffered last week after a US Coast Guard promised a thorough investigation into potential breaches of safety regulations in the grounding of the drill ship Kulluk. You can read more on this story at Group could face probe over Kulluk rig grounding

**Analysts on Shell**
JPMorgan Chase reaffirmed its ‘neutral’ rating on Shell’s ‘B’ shares in a note sent to investors last week. It lifted its price target on the stock to 2,325.00p from 2,270.00p.
Two investment analysts rate Shell as a ‘sell’, 12 give it a ‘hold’ rating, 13 are calling it a ‘buy’ and one rates it a ‘strong buy’. The stock has a consensus rating of ‘hold’ and an average price target of 2,264.67p.
**As of 13.00 BST buy Shell ‘A’ shares at 2,219.51p.**
**As of 13.00 BST sell Shell ‘A’ shares at 2,219.49p.**
**As of 13.00 BST buy Shell ‘B’ shares at 2,366.51p.**
**As of 13.00 BST sell Shell ‘B’ shares at 2,366.49p.**

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