LONDON, March 4 (Reuters) - British finance minister Jeremy Hunt is expected to announce a one-year extension of a windfall levy on energy firms' profits in this week's budget, industry sources briefed on the move said.
The energy profit levy (EPL) was introduced in May 2022 after a jump in energy prices resulting from Russia's invasion of Ukraine.
Hunt raised the tax in November 2022 from its initial 25% rate to 35%, bringing the overall tax burden on North Sea oil and gas producers to 75%, among the highest in the world.
The British chancellor also extended the tax to 2028 from 2025 and expanded it to electricity generators with a levy of 45% in an effort to raise tens of billions of pounds to plug a major hole in public finances.
In his annual tax-and-spend speech on Wednesday, Hunt is expected to extend the levy by one more year to 2029, the three sources told Reuters.
The tax rate, as well as a 29% investment allowance in the windfall tax that allows companies to offset spending, would remain unchanged, the sources said.
Britain's finance ministry did not immediately respond to a request for comment.
North Sea producers have warned in the past that the higher levy would lead to lower investment in the country's oil and gas output.
Over the weekend, Hunt sought to dampen speculation about big pre-election tax cuts in this week's budget, saying there had been a worsening in the economic outlook, but he hinted at some help for voters. (Reporting by Ron Bousso; Editing by Alex Richardson)
