Chancellor Promises Tax Breaks for North Sea Oil & Gas Industry
March 8, 2017
Chancellor of the exchequer Philip Hammond has outlined plans to establish tax incentives in the interest of supporting activities within the North Sea oil and gas industry.
The industry has been beset with challenging economic dynamics in recent years and thousands of Scots have lost their jobs as a result during that time.
Lobbying groups including the trade organisation Oil & Gas UK have been calling for the government to take action in support of the energy sector and welcomed announcements made by Mr Hammond during his spring Budget speech.
The chancellor explained to the House of Commons that a panel of experts will be assembled to assess precisely how tax breaks might best be used to encourage and support activity among oil and gas operators with interests off the coasts of Scotland.
A discussion paper outlining the key issues in these contexts is now set to be published on March 20th, with the hope being that the creation of a new tax regime will improve prospects for energy firms operating throughout the North Sea.
Issues relating to the tax treatment of decommissioning processes and the details involved in selling well-established oil and gas assets are apparently central to much of the debate on these subjects.
“We welcome the chancellor’s response to our call to resolve the tax issues slowing down asset transfers and his recognition of the need to maximise recovery of remaining UK oil and gas reserves,” said Deirdre Michie, chief executive of Oil & Gas UK, in a statement following the Budget on March 8th.
“The industry is slowly emerging from a very challenging period and it is crucial that the North Sea is successful in attracting investment in the near-term to sustain production and stimulate new activity.”
On the subject of Scotland and its finances more generally, Philip Hammond said during his Budget speech that the government in Holyrood is in line for a £350 million funding boost.
Mr Hammond said that the extra funding shows that Scotland and the rest of Britain are “stronger together in this great United Kingdom”.
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