7 Sept 2012
Chancellor of the Exchequer, George Osborne has announced today that the Government will be offering new tax breaks aimed at supporting billions of pounds of new investment in the North Sea for older oil and gas fields; whilst increasing tax revenues from the industry.
The announcement comes after the Government has been faced with criticism for increasing the supplementary charge on North Sea producers from 20% to 32% last year. This will now be a key step in attempting revive an industry that plays a key part the UK’s economy.
The Chancellor said: “Today’s tax allowance is more good news for the North Sea, good news for jobs and good news for the broader economy. It will give companies the incentive to get the most out of older fields, creating jobs and delivering more revenue for taxpayers.”
“This Government has signalled its absolute determination to get more investment in the North Sea, a huge national asset. Just last week, I saw the benefits at a supply chain factory creating many hundreds of jobs in the North East thanks to Government support for North Sea gas which made a major project possible.”
The Brown Field Allowance will shield up to £250m of income in qualifying brown field projects, or £500m for projects in fields paying Petroleum Revenue Tax, from the 32% Supplementary Charge rate. The level of relief available to an individual project will depend on its size and unit costs.