Economic Report 2017

E C ONOM IC R E P OR T 2 0 1 7

പ Figure 30: Historic Upstream Tax Rates

PR T- Pay ing PR T w ith SC R elief N on PR T- Pay ing N on- PR T w ith SC R elief UK Corporation Tax ( f or non ring- f enced businesses)

100%

9 0%

8 0%

7 0%

6 0%

5 0%

4 0%

3 0%

Marginal Tax R ate on ProĮts

2 0%

10%

0%

19 8 0

19 8 5

19 9 0

19 9 5

2 000

2 005

2 010

2 015

Source: H MR C

UKCS Production Tax Payments The UK ^ has entered a diĨĨerent, more mature Ɖhase, characterised ďy challenges around materiality oĨ many Ɖroũects, maintenance oĨ Ŭey huďs and inĨrastructure, and emerging decommissioning actiǀity͘ Loǁ receiƉts Ĩrom direct Ɖroduction tadžes illustrate the tough time the industry has edžƉerienced oǀer the last 2ϰ months, as sup p r e sse d oil and gas p r ice s h av e le d t o a sh ar p de cline in p r ofit ab ilit y . T h e p e r m ane nt z e r o- r at ing of P R T and t h e r e duct ion in com b ine d R F C T and SC w e r e p osit iv e st e p s t o p r om ot e inv e st m e nt in t h e b asin and w ill le ad t o long- t e r m gains. thile many, including ,D Treasury in Ɖreǀious Ĩorecasts, edžƉected Ɖroduction tadž receiƉts to ďe negatiǀe in 201ϱͲ1ϲ, the eĨĨiciency driǀe led ďy industry ǁas a maũor Ĩactor in maŬing the outturn receiƉts Ĩor the year Ɖositiǀe at £ 15 1 m illion. R e ce ip t s ar e e x p e ct e d t o incr e ase t o ar ound £ 1 b illion p e r annum ov e r t h e r e st of t h e de cade .

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