ABERDEEN-- Industry and analysts have given positive reactions to the first `emergency’ budget of Britain’s new coalition government. Proposals relevant to the offshore sector include a plan to lower corporation tax in phases over the next few years.
Industry association Oil & Gas UK said in a statement that it welcomed the government’s recognition of the importance of stability in the tax regime for Britain’s offshore oil and gas industry. “The sector is the country’s largest industrial investor and corporation tax payer and has a vital role to play as an engine of growth to help the nation’s economic recovery.
“Oil and gas projects have a life span of decades and as the government appreciates, fiscal predictability over the long term is essential if the UK is to be an attractive destination for new investment… It is encouraging that the Chancellor [of the Exchequer] has delivered a package of fiscal measures…which aims to promote innovation and stimulate growth and development across the whole of our industry.”
Andrew Ogram, Deloitte Oil & Gas tax partner in Aberdeen pointed out that no new or radical changes had been announced to UK North Sea taxation. “This is perhaps to be expected,” he said, “bearing in mind the short period that the government has had to introduce new measures.
“We welcome the government’s recently announced proposals to widen access to the UK’s offshore production infrastructure and the news that the secondary legislation will be introduced as soon as possible to extend the scope of the Ultra High Pressure High Temperature field allowance.
“It is to be hoped that future taxation measures will also be adopted to prolong the life of the North Sea and to maximize the recovery of reserves. The past few years has seen the previous government tinkering around the edges of the North Sea fiscal regime. If the intention is to prolong the life of the North Sea and maximize recovery of reserves we suggest that more radical reform will be necessary.”
UK industry welcomes budget proposals
Industry and analysts have given positive reactions to the first `emergency’ budget of Britain’s new coalition government.