The chancellor has said that measures to boost the oil industry will be in the 2015 Budget, which is scheduled to take place on 18 March, following his announcement during last month’s Autumn Statement that he would cut the supplementary charge on profits levied on top of UK corporation tax from 32% to 30%.
Alan McCrae, head of energy tax at PwC said: ‘The dramatic drop in oil prices is accelerating efforts already underway to support the oil industry and government is also looking to see what more can be done. The planned investment allowance to stimulate investment is now a matter of priority.’
Following Osborne’s statement, the government announced that it will consult until 23 February 2015 on a new basin-wide investment allowance for oil and gas projects on the UK continental shelf for introduction in a future Finance Bill. The investment allowance would exempt a portion of a company’s profits from the supplementary charge, similar to existing field allowances. The consultation document does not propose a specific proportion of capital expenditure that would set the level of the allowance. This will be announced alongside the finalised policy design. The consultation is Fiscal reform of the UK Continental Shelf: consultation on an investment allowance.
The chancellor has said that measures to boost the oil industry will be in the 2015 Budget, which is scheduled to take place on 18 March, following his announcement during last month’s Autumn Statement that he would cut the supplementary charge on profits levied on top of UK corporation tax from 32% to 30%.
Alan McCrae, head of energy tax at PwC said: ‘The dramatic drop in oil prices is accelerating efforts already underway to support the oil industry and government is also looking to see what more can be done. The planned investment allowance to stimulate investment is now a matter of priority.’
Following Osborne’s statement, the government announced that it will consult until 23 February 2015 on a new basin-wide investment allowance for oil and gas projects on the UK continental shelf for introduction in a future Finance Bill. The investment allowance would exempt a portion of a company’s profits from the supplementary charge, similar to existing field allowances. The consultation document does not propose a specific proportion of capital expenditure that would set the level of the allowance. This will be announced alongside the finalised policy design. The consultation is Fiscal reform of the UK Continental Shelf: consultation on an investment allowance.
