Company News
Industry Players Welcome Tax Breaks For Oil & Gas Sector
Tuesday 28th November 2017
Ravid
In the Autumn Budget, chancellor Philip Hammond announced that owners of mature producing fields would be able to pass on tax histories to buyers when selling assets, a move that has been roundly welcomed by firms working in the North Sea.
Professional services company EY, for example, said it could potentially have a huge impact on the industry, with head of oil and gas tax Derek Leith explaining that the announcement represents "an unprecedented change to UK oil and gas tax law", the BBC reports.
He went on to say that investing in the UK Continental Shelf is the best way of preserving this industry, which for decades has made big contributions to the economy in the UK, as well as supporting a supply chain that prioritises internationalisation and innovation.
Meanwhile, Deirdre Michie - Oil and Gas UK chief executive - was quoted by the news source as saying: "This is a vital step that can bring in new investment to increase recovery from existing fields and fund fresh investment which is key to generating activity for our hard-pressed supply chain."
She went on to add that the new tax measure should see deals completed more quickly and more efficiently, with the measure due to come into effect in November next year.
As the Financial Times reports, oil and gas companies can claim tax relief on the costs associated with plugging and abandoning wells, as well as removing infrastructure when their fields stop producing. Under the rules in place right now, however, a field's tax history can't be transferred when sold on.
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