BP has said Donald Trump’s sweeping changes to US taxes will knock about $1.5bn (£1.1bn) off its profits for the end of 2017.

The British oil company becomes the latest global firm to report a hit to its earnings from the US corporate tax rate cut, which came into effect at the start of the year after being signed into law in December. Barclays, Shell and Goldman Sachs have made similar statements in recent weeks.

Quick Guide How the tax bill changes business rules... and three people who will benefit Show More than 90% of companies in the US are pass-through businesses, meaning their income passes through to the owners' individual tax returns, where it​ is taxed at ordinary income tax rates, instead of​ ​being filed on a separate business return like a corporation.​ ​The bill cuts the top rate on “qualified” pass​-​through business income from 39.6% under current law to 29.6%​. Below are the savings key administration figures will see, according to the Center for American Progress: Donald Trump US president $11m-$15m Jared Kushner Senior White House adviser $5m-$12m Betsy DeVos Secretary of education $2.7m

BP said the changes had led it to revaluate its “deferred tax assets,” which allow firms to use past losses to reduce their future taxes, leading to the “one-off non-cash charge” in its fourth-quarter results for 2017. The company, which made a profit of $4.1bn last year when excluding charges incurred over the Deepwater Horizon scandal, will report its 2017 earnings next month.

Stock markets have surged in recent weeks after the US Congress pushed through the corporate tax rate cut from 35% to 21%, as investors think it will lead to a jump in company profits. BP said despite the one-off hit, the changes meant its earnings would be “positively impacted” in future.

Trump has said the biggest overhaul of the US tax system since the 1980s would be “fantastic for the economy”.



“Corporations are literally going wild over this, I think even beyond my expectations, so far beyond my expectations,” he said.

Critics claim the changes are a gift for Wall Street and rich people. It was also designed in part to push US multinationals to repatriate cash from overseas, after firms built up vast stockpiles of money abroad, rather than bring it back to the US where they would have to pay large tax bills.

It was estimated by Citigroup that US firms hold as much as $2.5tn outside of the US. The tax changes may help Apple to bring back its $252.3bn in foreign cash.

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