Economic Report 2013

This has been a substantial and long standing concern for the industry, which was exacerbated in the Budget of March 2011 when a restriction was introduced on the rate of relief allowed. Since then, Oil & Gas UK has led the industry in working with the government to secure the necessary tax reliefs for the whole of the UKCS. Subsequently, the Finance Act 2013 legislates for the introduction of Decommissioning Relief Deeds (DRDs), which will provide contractual certainty that costs arising from decommissioning activities can be offset against tax previously paid by companies (for RFCT and SC purposes) and fields (for PRT). Securing certainty for tax relief on decommissioning is a seminal moment for the industry. It will mean that the current barriers to the trading of assets are lifted, enabling these assets to be transferred to those companies most likely to develop them. In turn, this should unlock a significant amount of new investment to extend the productive lives of a wide variety of fields. All this has been achieved at no cost to the government and without requiring any pre-funding from the industry.

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ECONOMIC REPORT 2013