- Allowance welcome although proposal is less than industry had hoped for, says KPMG
- Important that questions on tax position on decommissioning are addressed, according to KPMG
Commenting on the Government’s announcement of a Brown Field Allowance (PDF 31 KB) for certain North Sea incremental production projects, Andrew Lister, head of Oil and Gas tax, said:
“Today’s announcement of a Brown Field Allowance will reduce the tax rate from 62 percent to 30 percent on profits of up to £500m from certain new investments on existing North Sea fields.
“Although the proposed allowance is at a lower level than had been hoped for, this news will be welcomed by many oil companies and those involved in oil services businesses as it should unlock investment in the North Sea.
“This represents further evidence of HM Treasury’s continued willingness to engage with the oil industry to seek to extract as much of the UK’s valuable hydrocarbon resource as possible.
“Looking further ahead, all attention will now turn to the perhaps more important consultation that is ongoing on decommissioning. We hope that policymakers will continue to work towards the Government’s stated intentions to provide certainty on the tax reliefs available on decommissioning in order to unlock even further investment in the North Sea.”
For further information please contact:
Margot Cowhig, KPMG Corporate Communications
Tel: 0207 694 4246 Mobile: 07920 274856: email@example.com
KPMG Press Office: 0207 694 8773
Notes to editors.
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.