New Tax Relief for North Sea Oil & Gas announced today
The Chancellor has today announced a new tax relief for older North Sea oil and gas fields, intended to encourage further investment in these so-called brown fields.The relief will operate as a tax
The Chancellor has today announced a new tax relief for older North Sea oil and gas fields, intended to encourage further investment in these so-called brown fields.
The relief will operate as a tax allowance, shielding a portion of otherwise taxable income from the 32% Supplementary Charge. The Brown Field Allowance will shield up to £250m of income in qualifying projects (or up to £500m for projects subject to Petroleum Revenue Tax) from the Supplementary Charge. In other words, the tax relief will be up to £80m or £160m, respectively. There will be rules as to what precisely is a qualifying project. The HM Treasury press release gives further information.
This latest announcement is an addition to the raft of measures announced in the Budget to encourage investment in North Sea oil and gas (perhaps most notably the Government's commitment to contractually guarantee long-term tax relief on decommissioning).
Industry bodies have indicated that the measure could trigger £2bn of further investment in the near term.
The relief will operate as a tax allowance, shielding a portion of otherwise taxable income from the 32% Supplementary Charge. The Brown Field Allowance will shield up to £250m of income in qualifying projects (or up to £500m for projects subject to Petroleum Revenue Tax) from the Supplementary Charge. In other words, the tax relief will be up to £80m or £160m, respectively. There will be rules as to what precisely is a qualifying project. The HM Treasury press release gives further information.
This latest announcement is an addition to the raft of measures announced in the Budget to encourage investment in North Sea oil and gas (perhaps most notably the Government's commitment to contractually guarantee long-term tax relief on decommissioning).
Industry bodies have indicated that the measure could trigger £2bn of further investment in the near term.