Economic Report 2017
Figure 31: Government Revenues from Oil and Gas Production Taxes
1
3 5
R ing F ence Corporation Tax Petroleum R ev enue Tax Supplementary Charge R oy alty Supplementary Petroleum D uty
3 0
2
2 5
5 ( £ B illion - 2 016 / 17 Money ) 10 15 2 0
3
4
0
5 6 7 8
19 9 8 - 9 9
19 9 6 - 9 7
19 9 4 - 9 5
19 9 2 - 9 3
19 8 8 - 8 9
19 8 6 - 8 7
19 8 4 - 8 5
19 8 2 - 8 3
19 7 8 - 7 9
19 7 6 - 7 7
19 7 4 - 7 5
19 7 2 - 7 3
19 6 8 - 6 9
Gov ernment R ev enues f rom Oil and Gas Production
2 02 0- 2 1
19 9 0- 9 1
19 8 0- 8 1
19 7 0- 7 1
( 5 )
2 018 - 19
2 016 - 17
2 014 - 15
2 010- 11 2 012 - 13
2 006 - 07
2 004 - 05
2 000- 01 2 002 - 03
2 008 - 09
Source: H M Treasury , Oĸce f or B udget R esponsibility
Facilitating Access to Decommissioning Tax Relief &urther adũustments to the Ĩiscal regime are still reƋuired to encourage caƉital inǀestment oǀer the longer term, as is clear Ĩrom the measures announced in the 2017 ^Ɖring udget͘ ^ƉeciĨically, the industry needs a mechanism to transĨer tadž history as Ɖart oĨ the sale oĨ oil and gas assets on the UK ^, so that a ďuyer can still oďtain Ĩull relieĨ for de com m issioning liab ilit y at t h e e nd of t h e fie ld’ s life . T h e cur r e nt inab ilit y t o t r ansfe r t ax cap acit y associat e d w it h an asse t fr om a se lle r t o t h e b uy e r h as b e e n a b ar r ie r t o inv e st m e nt in t h e UKC S. T h is is b e cause of t h e tadžͲďased ͚ǀalue gaƉ͛ that arises Ĩrom misalignment in asset ǀaluation ďetǁeen a seller ǁith a long tadž history and acce ss t o full t ax r e lie f on de com m issioning and a b uy e r w it h no such t ax h ist or y . T h e r e sult of t h is de al b ar r ie r is t h at lat e - life asse t s ar e le ss like ly t o b e sold t o ne w op e r at or s w h o b r ing fr e sh inv e st m e nt and b usine ss m ode ls t o t ur n non- cor e int o cor e asse t s. Indust r y h as b e e n w or king collab or at iv e ly w it h H M T r e asur y for m any y e ar s t o ide nt ify an ap p r op r iat e m e ch anism t o t r ansfe r t ax cap acit y . T h is p osit iv e e ngage m e nt is b e ing car r ie d int o t h e 2017 consult at ion on lat e - life oil and gas asse t s and t h e associat e d w or k of t h e sp e cially for m e d adv isor y p ane l of t ax e x p e r t s. If t h e gov e r nm e nt w e r e to Ɖroǀide certainty oĨ a solution in Autumn udget 2017, it ǁould encourage Ĩurther deal Ĩloǁ and Ɖromote ne w innov at iv e b usine ss m ode ls in t h e UKC S at a t im e w h e n ur ge nt ne w inv e st m e nt is ne e de d in t h e b asin. T h e E x ch e q ue r w ould b e ne fit fr om cash - flow adv ant age s due t o de fe r r e d de com m issioning and t h e b r oade r gain associat e d w it h fr e sh inv e st m e nt and act iv it y .
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