The association described the move as a positive signal to investors, but added that implementation should be fasttracked to take effect from the Chancellor’s Budget announcements in March.
CEO Malcolm Webb said: “We are encouraged to note that work on the investment allowance announced in the autumn statement is progressing. However, a reduction in the headline rate of tax is also essential to really improve the international competitiveness of the UKCS [UK continental shelf].
“Given the maturity of this basin, I’m afraid there will be no second chances.”
The association said the planned new allowance should be easily accessible for all investors and should help promote investment in all types of activity that maximize economic recovery and extend the productive life of the basin.
Oil & Gas UK added that it would seek clarification on various issues, including the rate of the investment allowance that must be competitive.
Webb said: “We now need a much lower, simpler, and more stable tax regime that will allow the investor to shift their focus away from fiscal risk towards investment opportunities. We see today’s announcement as a first step.”