The Coalition Government is calling for suggestions from industry experts to help it decide how best to use tax to encourage investment in the UK’s fast-expanding North Sea oil and gas sector. This call for evidence comes at the beginning of a 12-week period of discussions about how the Government can maximise investment in the UK’s natural resources, while ensuring levels of taxation remain appropriate (currently oil and gas firms pay much higher tax rates – between 60% and 80% – than other businesses).
According to Government figures the sector attracted a record £14.4 billion in private investment last year from 125 companies. Estimates put the remaining oil in the area at around 21 billion barrels. The Government’s allowances helped the industry tap into around £7 billion of hard-to-access fields last year, and officials are hoping they can further expand private investment in the sector by working with companies on a suitable tax regime.
Chief Secretary to the Treasury Danny Alexander used the call for evidence as an opportunity to attack the campaign for Scottish independence, saying:
“This review offers the opportunity to put the fiscal regime on the best footing to ensure that the economic potential of the North Sea can be maximised for the UK and Scotland.
“The broad and diverse UK tax base means we are able to support the industry through, for example, certainty over decommissioning tax relief.
“A separate Scotland is unlikely to be able to provide the same level of support and risks missing out on the economic potential the North Sea has to offer.”
Interested parties can participate in the call for evidence on Gov.uk.
Photo by Rachel Docherty