Tax on oil and gas sees Centrica cut investment
Chancellor's increase in tax on oil and gas production sees Centrica rein back on spending plans
CENTRICA, owners of British Gas, yesterday said it expected to cut investment as a result of the increased taxes on oil and gas announced in George Osborne’s March Budget.
In a statement to the markets the energy company said the increase in the Supplementary Charge from 20% to 32% would raise tax rates to 81% on some of Centrica’s oil and gas production. The effective tax rate on the group was estimated at 45%. This would amount to a £300m increase in the tax charge on last year.
The statement said: “The effectiveness of our economic hedge has been partially reduced by the UK government’s increase in tax rates for oil and gas production.
“With the resultant reduced cash flow and increased fiscal uncertainty, we no longer expect to maintain the previously projected high levels of investment in the UK.”