TaxCorporate TaxBrown and Darling extend oil tax olive branch

Brown and Darling extend oil tax olive branch

Under pressure Prime Minister and Chancellor announce new tax reliefs at oil and gas association meeting

The government is looking to tap into the potential of dormant oil fields by
luring companies with the prospect of attractive tax reliefs.

Gordon Brown and Alistair Darling announced that those carving out new oil
and gas fields out of unprofitable parts of 30 sites would escape the demands of
the Petroleum Revenue Tax.

The under fire duo went on a charm offensive this week at a meeting of Oil
& Gas UK, where they said want to do more to increase production. Brown
said: ‘We are providing incentives not only for existing fields but for new
fields. But this is not just a national problem, it’s a global problem.’

Fields liable to PRT currently cost their owners 50% on the net income they
rake in after extracting oil and gas from UK fields or a designated area.

The government is also making changes to the licensing structure for North
Sea oil fields and there are a number of extra hoops that oil companies will
have to jump through in order to qualify, the Department for Business Enterprise
and Regulatory Reform said.

‘It will be up to licensees to make a case for a change of field
determination on economic grounds,’ said DBERR. ‘This would then be scrutinised
by BERR, Treasury and HMRC officials to ensure there was a genuine case for
change and that it satisfied economic, geological and wider fiscal requirements;
it would then need to be approved by both BERR and Treasury Ministers.’

Further reading:

Oil
and gas companies get tax concessions

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