Oil & Gas UK responds to Treasury announcementNews // July 6, 2011
Oil & Gas Uk has responded to a recent announcement from the Treasury in the UK.
Mike Tholen, Oil & Gas UK’s Economics Director, said: “Oil & Gas UK considers HM Treasury’s announcement of an extension to the ‘Ring Fence Expenditure Supplement’ to be a constructive move.
"Whilst the change to the allowance will not redress the damage caused by the recent tax increase, it will help new investors to the UKCS who are otherwise disadvantaged compared to more established players.
"In making these changes, the government appears to acknowledge that the increase in supplementary corporation tax announced in this years Budget has made the UK less competitive.
"Oil & Gas UK is working closely with industry to establish the most effective means of encouraging investments which have been knocked back by the recent and unheralded tax increase.
"We anticipate that further measures, including extension of the existing field allowance structure to sustain investment in both existing fields as well as in new fields will be required. Oil & Gas UK are continuing to engage with HM Treasury on that basis.
"Oil & Gas UK is also working with the Treasury to find ways to achieve certainty regarding companies’ access to tax relief for decommissioning, which will encourage late life investment and liberate the transfer of assets to those companies best suited to maximise investment and lengthen the lives of mature fields. Here also, we hope to see matters resolved by Budget 2012."
Malcolm Webb Oil & Gas UK's Chief Executive said: "This is a first step in the right direction. We made it clear after the Budget that Government actions and not just words would be required to begin to rebuild trust and restore the confidence of investors. This will help some new players but much more action is needed including on other reliefs and on the important decommissioning problem in the light of the Budget. However this has to be seen as an encouraging first sign of some real progress."