The overall cost to taxpayers associated with oil and gas decommissioning between 2018/19 and 2062/63 is estimated to be around £24bn, a figure the NAO notes is subject to ‘significant uncertainty’. This is based on £12.9bn HMRC expects to repay in decommissioning tax reliefs, with a further £11.1bn in tax foregone due to operators’ profits being reduced by decommissioning expenditure.
The NAO report, Oil and gas in the UK: offshore decommissioning, found that HMRC has not historically calculated the total combined cost of decommissioning reliefs given to operators since 2014/15, but plans to publish this information for the first time in January 2019.
There are currently around 320 fixed installations, such as oil platforms, in the UK, primarily in the North Sea. HM Treasury had agreed 86 decommissioning relief deeds with operators by March 2018, guaranteeing tax relief at least in line with that available under 2013 rules.
The report is divided into three parts:
the role oil and gas has played in the UK economy and the government’s current objectives for the sector;
potential costs of decommissioning that operators will pass on to taxpayers; and
how the government is managing the risks to taxpayers.
The overall cost to taxpayers associated with oil and gas decommissioning between 2018/19 and 2062/63 is estimated to be around £24bn, a figure the NAO notes is subject to ‘significant uncertainty’. This is based on £12.9bn HMRC expects to repay in decommissioning tax reliefs, with a further £11.1bn in tax foregone due to operators’ profits being reduced by decommissioning expenditure.
The NAO report, Oil and gas in the UK: offshore decommissioning, found that HMRC has not historically calculated the total combined cost of decommissioning reliefs given to operators since 2014/15, but plans to publish this information for the first time in January 2019.
There are currently around 320 fixed installations, such as oil platforms, in the UK, primarily in the North Sea. HM Treasury had agreed 86 decommissioning relief deeds with operators by March 2018, guaranteeing tax relief at least in line with that available under 2013 rules.
The report is divided into three parts:
the role oil and gas has played in the UK economy and the government’s current objectives for the sector;
potential costs of decommissioning that operators will pass on to taxpayers; and
how the government is managing the risks to taxpayers.
