What is a windfall tax?

Windfall taxes are levied on industries that have benefited the most from unusual economic conditions, earning above average profits. They are often associated with the energy sector.

Rishi Sunak
Rishi Sunak has performed a U-turn on windfall taxes
(Image credit: © Hollie Adams/Bloomberg via Getty Images)

Windfall taxes are a one-off tax on a company’s profits. The idea behind them is to make firms pay for conditions that they had no hand in creating, but which they were lucky to benefit from.

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Saloni Sardana

Saloni is a web writer for MoneyWeek focusing on personal finance and global financial markets. Her work has appeared in FTAdviser (part of the Financial Times),  Business Insider and City A.M, among other publications. She holds a masters in international journalism from City, University of London.

Follow her on Twitter at @sardana_saloni